Second Half Rebound for Office Furniture
For the office furniture industry, orders and shipments started sliding during the fourth quarter of 2008, according to Tom Reardon, executive director of the Business and Institutional Furniture Manufacturers Assn. (BIFMA).
“While many companies had concerns and started taking action earlier in 2008, the actual downturn was abrupt and seemingly in direct response to the general financial meltdown. Many companies have reduced staff and/or working hours, and curtailed travel, meetings and other discretionary expenses. It’s a very tough environment right now.”
Reardon says that industry surveys indicate overall office furniture orders and shipments are both down about 30 percent for 2009 as compared to 2008, and that forecasts indicate that shipments could be down another 4 percent during 2010 before starting to see some recovery in late-2010.
“Corporate real estate development, corporate profitability and employment growth all have a significant impact on commercial furniture sales, and until those driving factors start turning around our industry will face some tough going,” he says.
|Production is total shipments by U.S. office furniture
manufacturers to all locations in the world. Consumption
is the value of all office furniture sold in the U.S. from
domestic and international sources.
But BIFMA remains optimistic and sees opportunity in these hard times. “These conditions force us to take a hard look at expenses,” says Reardon. “Where can we cut costs to be more efficient, invest in lean manufacturing principles or look at green technologies?”
The industry has continued to stay in the forefront of the environmental movement for more than 10 years. “Our industry has taken a proactive position and created a sustainability standard for furniture,” Reardon says. “We have used the ANSI consensus process to develop the standard and also created a certification program called ‘level,’ using independent third-party certification bodies, that supports conformance verification to the standard.”
Fixture Firms Looking for Second Half Revival
According to Klein Merriman, executive director of the Association for Retail Environments (A.R.E.), the decline in industry sales that began in the second half of 2008 produced a 3.5 percent decline for the year overall in the store fixture industry’s sales. On top of that, A.R.E.’s current estimate is that the industry declined an additional 22 percent in 2009.
“But all is not doom and gloom in the industry,” says Merriman. “The median projection from 73 companies in our industry, surveyed the second week of September 2009, was that sales would grow by 10 percent in 2010. If the holiday shopping season turns out better than forecasters are predicting, and if inventory-short retailers can avoid the profit-eroding discounting plaguing us the last two holiday seasons, there is hope our industry could experience a revival in the second half of 2010.”
On another positive note, Merriman says that relatively few companies in the retail environments industry have failed. “No one would have predicted our industry could experience a 25 percent drop in revenue over two years and see almost no supplier, manufacturer and retail design companies declare bankruptcy,” he says.
Tough Times Ahead for Architectural Woodworkers
Unlike others surveyed, the Architectural Woodwork Institute (AWI) is bracing for another tough year, says President Doug Carney. “If many economists’ predictions are on target, 2010 appears to be flat in comparison to 2009, and in some cases the custom architectural woodwork industry might even decline further from 2009 levels.”
Unofficial estimates show the custom architectural woodwork industry was down at least 30 percent on average in 2009 from 2008 levels. Slow housing construction, the evaporation of interior build outs and dwindling retail fixture markets created an influx of never before seen woodworking competitors that have migrated from other sectors, Carney says.
“Due to the lessened demand for custom architectural woodwork, our members will be forced to downsize their companies, cut overhead, delay capital investment and in general, pinch every penny. Savvy AWI member companies [will] identify new and different ways to leverage their value and production capabilities to meet new demands.”
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