History has taught us that short-term responses to global emergencies lead to changes that last for decades. With millions of Australians either in lockdown or restricted in movement, the pandemic has forced people to quickly and significantly change how we work, communicate, socialize, and use products and services.
The COVID-19 pandemic has, for the first time in modern manufacturing history, affected demand, supply and workforce availability at the same time. Basically, a COVID recession, howbeit the shortest global recession on record, Australia witnessed a stock market crash which saw major indices drop 20% to 30% in late February and March last year, and rapid increases in unemployment in many countries, including Australia. Despite this, the demand for woodworking machinery reached all-time highs in 2020, followed this year by long wait times for capital equipment, cabinet hardware and raw materials.
Eumabois, the European Federation of woodworking machinery and tools manufacturers, held its annual General Assembly on November 5th. The mood was positive with the woodworking industry showing a rapid and very positive recovery. Despite the fact that the woodworking industry suffers from both high material costs and a lack of raw material, the figures indicate sustained growth in the mid-term. Mega-trends such as digitalization and industrial automation, as well as a growing demand for home furniture and kitchens, stimulated by travel restrictions and the COVID cocooning effect, are driving the woodworking industry.
The hardware giant Hettich reports, “The demands on everyday life, home living and work are rapidly changing. Global megatrends, which normally take many years to take effect, have accelerated enormously in the COVID crisis. This is why industry; retail and the trades must now respond if they want to hold their ground on the market in future with their products and services. The time has come to completely rethink spatial and furniture concepts.” Only a year or so ago, the small apartment was the trend, especially in large populations. Here in Australia, many people restricted to urban areas are moving to the suburbs, eager to enjoy a lawn.
Hettich goes on to say, “Urbanisation, Individualisation and New Work are the three big megatrends of these times.” If people stay in their flat or apartment, they will want practical solutions for versatile living. Consumers are placing new demands and expectations on the design, use and function of rooms and furniture. And then there’s new work, or as we know it in Australia, ‘working from home.’ Recent surveys suggest that three quarters of businesses plan to shift some employees to permanent remote work after the pandemic ends and this will result in a permanent, improved market for home office furniture.
Multi-functional, versatile furniture is reportedly gaining popularity. The number of single and two-person households in Australia has been increasing. To 2016, 4.8 million households had one or two residents, compared to 2.6 million with three or four residents. Will this trend result in increased demand for small and portable furniture? Will consumers look for furniture that is multi-purpose, foldable, and technology-driven, especially when it comes to living in smaller spaces? And for those moving to the suburbs and beyond, will it be time to replace a kitchen or bathroom, especially for those people working from home who notice every day, that it’s past its use-by date?
‘New Work’ is no longer a buzzword. What began as a revolutionary concept in the 1970s has now established itself due not only to the pandemic, but to increased digitisation and breakthrough’s in communication using zoom, teams, and Google meet. What will be the effect of more people working from home? What will the home workplace look like? What’s called for are transformable and adaptable work environments that provide ways of responding to constantly changing demands and provide a good work-life balance. New work offers furniture manufacturers and retailers opportunities to reach a completely new target group.
How will manufacturing change? While manufacturing in Australia continued through the pandemic, COVID has accelerated progress toward digital transformation. It is here that Industry 4.0 can future-proof your business. Is the industry moving from a skills-based to a technology-based structure? In the near future there could be less reliance on people to actually do the work, and more reliance on people who understand and can manage technology. Automated manufacturing will not bring back demand for low-skilled labour but will create new jobs and opportunities for digitally-savvy workers. Is automation a key component to revive domestic manufacturing? And what will this do to the training sector?
Is it possible to cash in on the trend for online purchases? Never before has online content been more in demand. It is the fastest-growing channel in developing markets. 68 percent of manufacturers have indicated online sales have grown between 11% and 50% over the last 12 months. An increasing number of manufacturers now have a Facebook page or use a visual discovery engine such as Pinterest. More furniture manufacturers are also choosing to go green. This trend is driven by environmental concerns and although eco-friendly furniture is more expensive, the demand is on the rise, making it worthwhile for manufacturers and companies to offer these products.
Companies that depend on supplies from distant sources have struggled to maintain operations during the pandemic. This is especially true for manufacturers, including those in the kitchen and bathroom sector who have had difficulty sourcing cabinet hardware. Timber is another material in short supply and there are manufacturers who are over-purchasing whenever they can, stockpiling material for future use. In late July 50 containers of timber bound for Australia were abandoned at a Shanghai dock because a shipping company accepted a lucrative offer to divert course to Los Angeles. To mitigate similar global supply disruptions in the future, is it possible to develop regional supply sources?
The Centre for Future Work senior economist Alison Pennington said, “Australia has substituted high-productivity, value-added manufacturing for a reliance on unsophisticated resources extraction.” In other words, our over-reliance on mining means Australia is not a sophisticated manufacturing nation. In fact, we rank 93rd in the world on that scale. A report by the centre, reported in The New Daily, noted that, “If Australia produced as much manufactured output as it consumed, it would generate an extra $180 billion in output and create almost 700,000 direct and indirect jobs.” COVID has produced many more questions than answers, but maybe in this pandemic, the impetus is there to build a better manufacturing future for Australia.
Pictured: Eumabois General Assembly
Article by Philip Ashley