Even as furniture makers target new markets, overall furniture exports are expected to decline 18 percent this year as demand in Europe and the United States sags because of the recession.
In contrast, domestic handicraft makers are expected to be largely unaffected by the crisis.
Sae Tanangga Karim, the executive director of the Indonesian Furniture Industry and Handicrafts Association (Asmindo), said furniture exports for this year were projected to total $1.6 billion, down 18 percent from $1.95 billion in 2008.
“There’s nothing we can do about it, since our two biggest market destinations have reduced their demand in line with the crisis,” he said.
However, furniture exports should improve in the second half, Sae said, after the European and US economies apparently bottomed out in the first half. First-quarter exports were down 24 percent compared with the year earlier, according to Asmindo data.
Exporters have been targeting new markets in the Middle East and Eastern Europe, but Sae warned that it would not make up for lower volumes in Western Europe and the US, which buy a combined 70 percent of the country’s furniture exports.
Sae said the downturn was a lesson for furniture makers that they needed to expand and diversify their export markets. At present, Indonesia only contributes 2.5 percent of the world’s furniture, with China acting as a major player.
Meanwhile, Sae said the economic crisis has had little impact on the handicrafts sector, with export values expected to remain steady near last year’s total of $700 million.
Demand for handicrafts had remained stable because the products were generally more affordable and less durable, he said. However, he said handicraft makers should not become complacent and should pay more attention to changes in public tastes.