SMEs in home decor sector back on their feet

Business Standard,

The home furnishings and home decor accessories industry is back on its feet, with the effects of the economic slowdown waning slowly, according to the findings of a survey of SMEs in the industry, conducted by IndiaMART Knowledge Services (IKS).

About 58.3 per cent of the respondents reported that the market has picked up since 2009, while 29.17 per cent replied that there was no change. Consumer sentiment also showed an upward trend, with 70.8 per cent of respondents witnessing an upward trend, though marginal, while 12.5 per cent said the rise had surpassed their expectations.

When compared to 2009, 16.67 per cent of the respondents said their sales had risen by more than 20 per cent and 66.67 per cent said their sales increased by up to 20 per cent. As against this, 16.67 per cent said their sales had declined.

With respect to product prices, five per cent said prices had shown adverse trends in 2010 and 25 per cent reported no change over 2009. While 45 per cent of the respondents recorded a slight improvement in prices, 25 per cent reported a significant improvement compared to 2009.

The findings reveal that the increase in input costs is greater than the improvement in product prices. A majority of the respondents (60 per cent) experienced significantly increased input costs, while 35 per cent said that the rise was marginal. Only five per cent reported stability in inputs costs.

As regards exports, 16.67 per cent of SMEs said their export demand had declined in 2010, 62.5 per cent reported an improvement of up to 20 per cent, and 20.8 per cent reported an improvement of more than 20 per cent. Clearly, the sector has begun to witness better export demand.

Only 15 per cent of the respondents are satisfied with the liquidity scenario, while 85 per cent said that liquidity needs to be further eased.