The Polish wood and forestry industry has shown systematic growth over the last few years. Currently, Poland is among the leaders in the production and export of wooden windows, floors, and furniture in Europe. However, factors such as decreasing availability of domestic raw materials, imports from China and Vietnam, and high labour and energy costs are causing a drop in the competitiveness of Polish producers – points out the industry and adds that the wood prices in Poland are amongst the highest in Europe. The industry is appealing for stability and clear rules in determining the sales prices of wood by the State Forests.
“The furniture industry has been consistently developing for the last 15 years, in part due to access to cheap, predictable raw materials. It sourced not only timber or wood products from sawmills, but also wood-based panels, which are very important for the timber industry. As Poland is the second-largest producer of wood-based panels, it provided the furniture industry with good raw material for its products. As a result, a few years ago Poland took second place in global furniture exports after China,” points out Jarosław Michniuk, CEO of Paged Furniture in an interview with Newseria agency.
Poland is a European leader in the production and export of wooden floors. It also ranks first in export and third in production of wooden windows, with the production and export of furniture also highly placed.
According to data from the Polish Chamber of Commerce for Furniture Manufacturers and B+R Studio research agency, the furniture industry ended last year with a sales volume of PLN 64 billion, confirming a steady, albeit slight, downward trend of about 4% per annum for the last two years. Export values, which have traditionally been the industry’s driving force, fell by 6%, while imports increased by 10%. Sales profitability fell to 5.2%, with employment in the sector falling by over 13%.
“The simple advantages we had 15 years ago are disappearing. For example, cheap labour – the minimum wage has risen by 40% over the last three years, and from 1st January we have another increase. We also have some of the highest electricity costs in Europe. So, there are no more simple cost advantages and it is necessary to build advantage through design, innovation, modernity, automation, digitalisation of processes. All of this requires investment, but if the profitability of the furniture industry, which is usually between 4 and 6%, is not increasing, then there is also a lack of funds for investment. So, we are dealing with a genuinely difficult situation and a turning point.” Evaluates Michniuk.
The B+R Studio’s “Polish Furniture Outlook 2025” report indicates that 2024 was another tough year for the Polish furniture sector, which struggled with rising production costs, falling demand, and competition from abroad, particularly from the Far East. These factors weakened the position of the Polish furniture industry in international markets.
“The future of the industry depends on how we address certain issues. If we end up with less wood supply for the industry, the price will increase. The demand for these products is high, which means that the furniture industry in Poland will be sourcing more expensive raw materials and that competitiveness will continue to weaken. Wood is a key cost element in the production of wooden products, including furniture.” says the CEO of Paged Furniture.
Representatives of the furniture and timber industries assess that the Ministry of Climate and Environment’s plans to exclude 20% of Poland’s forests from forest management may hit Polish companies, which due to rising labor or energy costs face serious challenges. The Polish Chamber of Commerce for Furniture Producers estimates that the moratorium on felling means limiting the supply of highest quality raw material, crucial for many segments of the industry. In the context of already existing problems with the availability of timber, every further limitation has significant consequences. For example, in the Regional Directorate of State Forests in Bialystok, as a result of the moratorium, the supply of highest quality hardwood fell by 30 to 40%. The price of wood, which is among the highest in Europe,is also problematic.
“We are in this extraordinary situation where the main supplier of timber in Poland is the State Forests – a state-owned company. Such a situation does not exist in any other country, usually the share of state forests to private ones is half and half, often with a predominance of private forests, but here the state owns the forests and influences how to shape the policy of the state forests. In 90% of the cases, the State Forests are the source of timber supply. If we have no control over how we set bidding prices at auctions and cause the State Forests to raise prices to the highest in Europe, we are cutting the branch on which we sit, and the future of the entire timber industry is at stake.” Emphasizes Michniuk.
The Polish Chamber of Commerce for Furniture Producers estimates that in 2025 the raw material supply will fall by 2-3%, which may result in a further increase in its prices, reducing the profitability of furniture production in Poland.
“It is hard to say that we will reduce the price of energy, since over the years we have not done an energy transition, now we have to accelerate it, but these are long-term processes. On the other hand, changing the price of timber is a process that can be done with a single decree by the Director General of the State Forests. You have to look at the whole picture, not only from the point of view of the interests of one institution, but the entire value chain.” explains the expert. “One zloty earned from the sale of a cubic meter of wood corresponds to about PLN 12 that can be earned in the added value chain in the whole industry. Because this wood can be processed into wood products in Poland, which are then used by the furniture industry, which in turn exports a product of much higher added value. The price of a cubic meter of timber is no longer 500 PLN, but much more.
Jarosław Michniuk indicates that the furniture industry is an example of how all of Europe and its industry is losing competitiveness against Asian countries or the USA. The report by Mario Draghi published in September 2024 paints a bleak economic future for the European Union unless it undertakes multi-billion dollar investments in innovation and energy transformation.
“Costs of European producers are increasing, but there is no increase in their efficiency. Of course, these costs are objective: labor costs, which cannot be much altered, electricity costs, where new, cheaper sources must be sought, but there are also costs associated with programs, for example related to the promotion of sustainable development. These are definitely good directions, but the question is whether we are not doing it too quickly in Europe.” says Jarosław Michniuk. “An easy example, Europe emits 7% of greenhouse gases, especially CO2, in the world scale, and we want to be climate neutral by 2050. Even if we achieve climate neutrality, how will it change the emission of carbon dioxide worldwide, since China, India, and the United States emit 42% of CO2.”
