Experts: Weak German industry benefits Lithuanian furniture makers

While industry in Germany and the eurozone as a whole faces significant challenges, Lithuania’s industrial indicators show a growth trend. According to experts, there were many obstacles in 2024, but this year is expected to bring greater growth and new opportunities for expansion.

Lithuania seizes the opportunity
Citadele Bank economist Aleksandras Izgorodinas notes that Germany is currently going through a particularly difficult period in the European Union, with its industry suffering from a loss of competitiveness, the effects of China’s economic slowdown and tariffs.

“While Germany’s industry is weakening, Lithuania’s industry is strengthening. Several factors are contributing to this industrial recovery, but the most important is the successful takeover of contract manufacturing. It seems that Lithuania has managed to capitalise on this situation and is receiving more orders from German manufacturers,” says Izgorodinas.

Ingrida Grikpėdienė, head of VMG Wood Invest, agrees. She notes that the competitiveness of Lithuania’s industrial sector has increased significantly, based on the industry’s performance.

“A positive change was already observed in the third quarter of 2024. Certain segments, such as demand for kitchen cabinets, grew by 15% in just six months,” – says Grikpėdienė.

Market growth hampered by labour shortage
Economist Izgorodinas acknowledges the positive dynamics of the Lithuanian furniture industry and predicts future growth.
“Exports of Lithuanian-made furniture remain weak, but there is good news. In December 2024, the annual decline in exports was only 1.1% – the smallest decline in almost two years. Exports are expected to grow in the coming months,” says Izgorodinas.
According to Grikpėdienė, the future of the furniture industry depends not only on export performance but also on the ability to address labor market and raw material cost challenges.

“The market is currently struggling with rising labor costs, high timber prices, and stagnating export market economies. There is also a significant shortage of skilled workers in regional areas,” says Grikpėdienė.

She highlights that Lithuanian industrial companies are rapidly investing in production process automation. She emphasizes that it is important not only to encourage investments in regional areas but also to ensure the necessary infrastructure to support growth.