How can we keep the Egyptian furniture industry flourishing?

Furniture manufacturing in Egypt is facing compounding issues that are challenging the centuries-old industry, according to industry players Enterprise spoke with. Despite falling export volumes on the back of high production costs and shortages in raw materials due to the ongoing FX crisis, stakeholders in the industry see a silver lining in the positive indicators slowly driving export rates and the government’s support.

The sector in numbers: Furniture manufacturers in Egypt amount to some 140k factories and workshops, with a total working manpower capacity of 900k direct and indirect workers, according to Tarek Habashy, undersecretary of the Federation of Egyptian Industries’ (FEI) furniture manufacturing division and SAI Solutions Chairman. The number of registered workers in the furniture sector increased 13.5% y-o-y in 2022 to reach 69k workers, according to the Industrial Development Authority’s (IDA) latest data in the Global and Local Furniture Manufacturing report. The vast majority of the industry continues to operate in the informal economy, with only 20% registered and operating in the formal economy, according to sources who spoke to us.

Furniture contributes a pretty penny to the national economy: For every EGP 1 that is spent on the furniture manufacturing industry, EGP 0.50 is added to the Egyptian economy, compared to EGP 0.30 on average from the entire industrial sector in Egypt, according to the FEI’s report. The wood and furniture industry contributes up to 2.2% of Egypt’s GDP, and with every EGP 1 mn invested in the furniture industry, 10 jobs are provided, compared to three job opportunities in other sectors.

Our exports at a glance: Egypt’s furniture exports fell 8% y-o-y during the first half of 2023 to record about USD 136 mn compared to USD 145 mn during the same period of 2022, Al Mal reports. Saudi Arabia, the UAE, Iraq and the USA accounted for the majority of exports.