21 Mar Foreign markets of interest in the furniture industry: Latin America

Once again, here we analyse the foreign markets of interest within the furniture industry.

After dealing with African countries such as Senegal and the Ivory Coast, and travelling northwards to get to know Nordic Countries situation, now it’s the time for Latin America.

South American continent is a key scenario for those furniture businesses who want to go international.

Crammed with opportunities, but made up of endless different settings.

In this article, we will get a little more familiar with its general situation, future perspectives and nature. We will also deal specifically with different countries’ furniture markets.

Join us on this journey.

Furniture market in Latin America: general growth

In 2024, Latin-American furniture market reached an approximate value of USD 17.36 billion.

Over the next few years, from 2025 to 2034, its Compound Annual Growth Rate (CAGR) is forecast to increase by 5.5%.

Growth prospects show an income increase of USD 11 billion by 2029, rising to USD 28.11 billion in 2034.

Such predictions have been drawn up by the AFAMJAL, the Mexican Association of Furniture Producers in Jalisco.

AFAMJAL is responsible for organising two of the biggest commercial fairs in South America: Expo Mueble Internacional and Tecno Mueble Internacional.

Over the past editions, delegations of countries from all over the world, such as the United States, China and nearby Brazil, attended these events.

As we will see below, Mexico is a country with a lot to say about its role in the global furniture industry.

Growth causes

If we take a closer look, we will notice that a variety of different causes contribute to such growth.

First of all, the increase in construction and the expansion of trade, hospitality (contract) and real estate industries.

This has been followed by a progressive increase in average incomes, leading to a greater inversion in house renovation, and the rise of new trends related to DIY (“do-it-yourself”) and RTA (“ready-to-assemble”) furniture.

Last but not least, the interest in ecological and sustainable furniture, supported by the general abundance across the whole continent of different woods such as acacia (wattle) and bamboo, as well as recovered timber.

Some of the main countries in the furniture industry

Let’s now take a brief tour through some of the main countries of the South American continent and analyse the furniture and timber industry’s situation in each of them.

We will learn about the particularities, distinctive features, international position and the situation of the furniture industry in such countries.

In this article, we focused on: Mexico, Argentina, Ecuador, Uruguay, Panama and Costa Rica.

Mexico

Although located in Central America, Mexico is one of the so-called Latin Countries.

It is the fifth biggest furniture exporter in the world.

As of July 2024, figures regarding furniture amounted to USD 12,899 million.

Mexico’s exports to other Latin American countries exceed those of such countries as the United States and Canada.

China played a key role in promoting the Mexican furniture industry.

Argentina

Argentina relies on more than 2,000 registered furniture businesses, 90% of which are SMEs.

40%-50% of its production is considered part of the “grey market” (that is when distribution channels differ from those authorised by the manufacturer or producer).

The Argentinian furniture industry is clearly no exception to the country’s ongoing economic crisis, from which it has been affected and hindered.

That fact brought about a downturn in the domestic market, an erosion in profitability due to high interest rates and the expensive costs of all dollar-related components which are part of production chain.

In its favour are the abundance of timber resources and a large presence of productive clusters.

Imported furniture in Argentina represents 20% of the total, being China also the main exporting country here.

Ecuador

The Ecuadorian timber sector comprises more than 650 companies.

Local timber producers supply most of the country’s demand.

Over the last few years, the furniture industry has moderately grown and exports have been increasing.

Uruguay

Uruguay presents a very fragmented furniture industry without any major producers.

90% of businesses are Micro SMEs with less than 4 workers.

Only 2% of the furniture companies in the country exceed 20 workers.

40% of local production is exported to other countries, especially to Argentina. The remaining 60% is used to meet the domestic demand.

It is worth highlighting that per capita furniture consumption in Uruguay is higher than in the neighbouring countries.

A turning point for the Uruguayan furniture industry was in 1989, when the agreement on the creation of MERCOSUR was signed, increasing import trade with the rest of the member countries, especially Brazil.

Panamá

Most of the Panamanian furniture industry is made up of small high-end businesses, quite widespread across the country, focused on the exploitation of solid wood.

Among these woods, the most used are cedar, laurel and teak, which are very durable in damp environments.

Most of the domestic furniture market is supplied by import trade.

Over the last few years, the strong competition from foreign chains, to which many of the leading distributors belong, has challenged the industry.

Costa Rica

Costa Rica extends on 51,100 square kilometres with a population of almost 5,200 million people.

Its furniture industry is represented by about 200 registered businesses, most of which are specialised shops and big home furnishing chains.

The distribution system is mostly based on direct sales from local producers to customers.

All this information is undoubtedly useful to know.

However, it is true that our geographical distance from South America often implies an added obstacle.

An extra challenge to strike up trade relations with these countries.

As always, our blog will keep reviewing overseas markets of interest to the furniture sector.

Stay tuned.

FMY