LONDON--(BUSINESS WIRE)--Technavio analysts forecast the furniture manufacturing market in Bosnia and Herzegovina to grow at a CAGR of more than 6% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the furniture manufacturing market in Bosnia and Herzegovina for 2016-2020. To calculate the market size, the report considers the furniture produced by manufacturers in Bosnia and Herzegovina. The report also presents the manufacturer landscape and details of furniture manufacturers in the region.
Technavio consumer and retail analysts highlight the following three factors that are contributing to the growth of the furniture manufacturing market in Bosnia and Herzegovina:
- Boom in real estate industry
- Abundance of forest reserves
- Focus on organized retailing by manufacturers
Boom in real estate industry
The real estate industry in Bosnia and Herzegovina is witnessing steady growth because of an increase in tourism, and the entry of a number of MNCs and foreign companies. Foreign investments in the tourism sector accounted for over 3% of the total foreign investments that flowed into the country in 2014. In 2015, Bosnia and Herzegovina received an investment of approximately USD 10.86 million from Qatar for the construction of a sports-recreation and tourist center. The number of tourists that visited the country in 2013 amounted to more than 800,000, up by 12.9% compared to 2012. This has resulted in an increased demand for five and four star hotels in areas such as the Olympic Mountains, Sarajevo, and Herzegovina. It is expected that, between 2000 and 2020, tourism in the country will grow at the third highest growth rate worldwide.
According to Brijesh Kumar Choubey, a lead analyst at Technavio for research on retail goods and services, “Bosnia and Herzegovina is also witnessing a boom in its housing sector, which in turn is driving the growth of manufacturers of furniture. Demand for luxury furniture products is expected to be high during the forecast period because of an increase in the number of ultra-high net worth individuals in the country.”
Abundance of forest reserves
Bosnia and Herzegovina has a strong heritage of wood processing and forestry dating back to the second half of the 19th century. Forest resources in Bosnia and Herzegovina are highly diversified, resulting in the availability of trees belonging to various species. According to the World Bank statistics from 2015, the total area covered by forests amounts to 2.18 million hectares, and accounts for 42.7% of the land in the country. As per the 2015 data provided by the FAO, 80.43% of forests in Bosnia and Herzegovina are owned by the government, and only 19.57% of the forests are owned by private individuals. Forests in Bosnia and Herzegovina can be classified into high forests, coppice forests, shrubbery and barren land, and other forest areas. High forests account for 51.13% of the forests in the country, coppice forests for 38.75%, and shrubbery and barren land account for 9.83%. In 2015, forests containing only broad-leaved species accounted for 70% of the total forest cover in Bosnia and Herzegovina, followed by mixed forests containing broad-leaved and coniferous species with a share of 25%, and forests containing only coniferous species with 5%.
“More than half of the country's land, approximately 53%, is covered by forests, and the country is one of the richest in terms of forest resources compared to member countries in the EU. Such abundance of forest reserves ensures cost-effective and easy availability of wood, a key raw material for manufacturers in the furniture industry,” says Brijesh.
Focus on organized retailing by manufacturers
A shift in consumer preference toward organized retailing is being observed in the country, primarily because such retailers offer a large number of products belonging to various brands under one roof, which not only helps consumers save time, but also provides them with a greater choice. Hence, manufacturers in the furniture manufacturing market in Bosnia and Herzegovina are focusing on channel strategies involving organized retailers to enhance sales. They are also focusing on branding and renovations of outlets to enhance the brand image and in-store experience of consumers. This focus on organized retailing is expected to contribute to the growth of the market, as convenience and comfort have become increasingly important for consumers due to hectic work schedules and changing lifestyles.
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