The key to getting rid of the dilemma of furniture manufacturing is to increase productivity

Recently, the United States' World Large Enterprise Research Association found that China's productivity growth has turned into negative growth for the first time since the Cultural Revolution in the 1970s. For the furniture industry, cost growth has become a long-term trend. In my opinion, the problem of China's furniture manufacturing industry is far more than that, and the focus of getting out of the dilemma is to increase productivity.

In recent years, the productivity of the furniture industry has risen less than the increase in wages, so the cost of furniture manufacturing has increased more than sales.

When the National Bureau of Statistics and the China National Association evaluate the furniture industry, there are often large differences. Because the Bureau of Statistics is based on the statistics of the manufacturers of the Trade and Industry Bureau and above the scale, the Bureau of Statistics must have a basis for calculation. correct. However, the reality is that there are many small and micro enterprises or self-employed households, home decoration and furniture, there is no industrial and commercial registration, this number is not a minority, therefore, the association often multiplies the national statistical bureau by two to estimate the national furniture production.

According to the report of our Statistics Bureau, in the first six months of this year, the main business income of China's furniture manufacturing industry was 328.2 billion yuan, an increase of 12.9% year-on-year, but the cost was 280.4 billion yuan, an increase of 14.1% year-on-year. The cost growth exceeded sales. Growth of 1.2%. The increase in costs led to a 21.4% increase in the loss of loss-making enterprises and a total loss of 1.25 billion yuan in the furniture manufacturing industry.

The cost increase of China's manufacturing industry is a long-term trend. On the other hand, domestic and foreign markets are not very prosperous, which is really worse. In my opinion, the problem is not only that. In the long run, the ageing of workers and the different qualities of new and old workers are issues that we will soon face.

I think the key point to get rid of the dilemma is to increase productivity.

China's industrialization should be very mature in 2038.

In the past 30 years, our productivity has increased by about five times, and now it is about 200,000-250,000/person/year. This productivity is still only one-third to one-fifth of the developed countries, which means we improve. There is still a lot of room for productivity.

At present, we have a population of about 5 million people in the furniture industry, half of whom are engaged in business and circulation, and the other half are in manufacturing, which is 2.5 million. Our labor force is currently about 40 years old. Most of them will retire in the next 20 years. Therefore, it is necessary to study the labor supply of these workers before retirement and after retirement, and also increase productivity. Add elements to consider.

From the experience of the past 30 years, assuming that our productivity doubles every 10 years, then by 2038 or earlier, we are likely to reach 1,000,000/person/year of productivity, which is the productivity of today's Japanese furniture industry. index.

——Assume that our productivity can reach 400,000/person/year in 2018, and our labor force will have about 20-30% retirement. However, due to the improvement of productivity, the labor supply during this period can basically be satisfied. Workers who are directly involved in furniture production should have about 2 million people.

——In the 10 years from 2018 to 2028, China’s industrialization level should be at a mature stage. The productivity of the furniture industry should reach 800,000/person/year, and our original labor force will be reduced by 50%. They all reach the age of retirement. At this stage, the industrial workers directly involved in production should be around 1.2 million, or even lower than 1 million. Of these, less than 30% are traditional woodworkers, and the other 70% are general workers or new ones. Industrial workers, but the labor supply during this period is basically balanced.

-- In the next decade, China's industrialization should be very mature, and workers' wages should reach the level of today's developed countries. Therefore, the productivity of our furniture industry should reach 1,000,000/person/year, and the number of workers in the entire industry should be less than one million people, and they are all “new workers”. They are better educated, understand computers and CNC. When new equipment is used, many parts and components should be outsourced, even to Southeast Asia, India and Pakistan.

Latest research shows that China's productivity development has turned into negative growth for the first time

These predictions are based on the improvement of productivity year by year, but can China be so smooth? Hard to say. A recent study by the World's Large Enterprise Research Institute in the United States found that China's productivity growth has turned negative for the first time since the Cultural Revolution in the 1970s.

Since the global financial crisis, China’s labor, energy, credit, and land costs have risen sharply. On the other hand, the input-output ratio of Chinese companies is declining. This is a typical feature of the “middle-income trap.” Brazil and Malaysia in the past. Other emerging economies have also fallen into this state after rapid development in the early stages.

The study said in the report: over-construction, overcapacity and inefficient SOE products will drag economic growth into the market. They used Total Factor Productivity (TFP) to calculate that China's TFP increased by 3.3% in 2001-2007, but fell by -0.9% in 2007-2012. This reality is a wake-up call to us. Without productivity improvement, my predictions will become empty talk.

There have been many ways to solve the dilemma of the furniture manufacturing industry. "Productivity" may be the most fundamental answer.

For more information on China's furniture industry, please pay attention to the official website of Xianghe Furniture City ().