AMMAN — The local furniture industry is anticipating a 10-15 per cent decline in sales this year, which would pressure 20 per cent of businesses to close, according to senior stakeholders.

The sector’s decline in sales, according to their representative at the Amman Chamber of Industry, Saad Steiteh, goes hand in hand with a decline in exports as well.

“The situation in Syria and Iraq, previously two of our biggest customers, has been negatively influencing the sector for years,” he said in a phone interview on Saturday.

Locally, he attributed plumetting sales to the reliance on imported furniture and kitchen installations at prices described by the representative as “unfairly cheaper than the locally-produced alternatives”.

Stakeholders who spoke with The Jordan Times echoed Steiteh’s concerns. Furniture producer Marwan Abdelraheem lamented that “imported Turkish and Chinese furniture are flooding the shops”.

He added: “It is much cheaper for a shop, and thus for the customer, to buy a piece of furniture that does not have high operational costs and taxation added to its price. Even with customs taxes, imported furniture is still cheaper than what we locally produce.”

Abdelraheem said that if they were to sell their products for the same rates as imported ones, they would incur a 40 per cent loss.

“We have to cover water and electricity bills, wages, transportation costs and then at the end of the year pay income taxes. We cannot possibly compete with countries where the industry not only has lower operational prices but also incentives,” he explained.

Head of the Jordan Furniture Exporters and Manufacturers Association Sharaf Hayajneh said that the sector “cannot handle the taxes imposed”, adding that the new billing system for industries’ operational costs is “impractical”.

The new billing system Hayajneh refers to is the government-dictated requirement that water and electricity bills must be deducted from a bank account rather than paid in person.

“This means that the money will be cashed at the beginning of each month. That poses a problem because furniture producers do not get paid in full. Most commonly, a producer will get paid 25 per cent before production, then 25 per cent halfway through and 50 per cent after completion,” said the association’s president.

He added that the sector “would benefit from a more flexible solution, one where the producer can pay the bills in the middle or end of each month, when he or she has received the money from clients”.

Hayajneh concluded that the sector needs “immediate assistance”, saying that the 20 per cent of businesses lost is “a serious indication of trouble ahead”.

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