While media reports regarding the current state of the American economy are generally dismal, a recent survey of CWB’s VIP panelists revealed a surprisingly optimistic outlook for 2009. Almost 50% expect their company’s sales to meet or exceed 2008 levels, and almost 11% predict definite growth next year. (See chart the chart on the right.)

The survey was conducted at the end of November among 810 panel members; 165 completed the survey. Respondents represented all major woodworking market segments and companies with sales ranging from less than $50,000 a year to $20 million.

A majority of respondents indicated that they will take definite measures to counteract the economic challenges in order to reach their objectives. When asked if their company will change its sales or product strategies in 2009, 62.4% said, “Yes.”

When asked to describe all the measures they will take, half of that group said they plan to add a new product line or category to supplement the work they typically focus on. Half said they will increase their marketing efforts and advertising, and almost as many said they will market their core products and services to new customer groups. A little more than one-third plan to expand into new geographic territories. A few companies said that they plan to simplify their existing product lines or categories to focus only on core areas.

Based on the survey results, it appears that despite a tight economy, woodworking companies plan to purchase new machinery in 2009. Roughly 27% said they definitely will buy new equipment next year, and almost 38% said they will if the economy improves. (See chart on the left.)

Their purchase plans cover the gamut of machinery and represent some serious investments. When asked to specify what types of equipment they plan to buy, CNC equipment was at the top of the list, followed closely by various types of saws and sanders. Other categories mentioned by several respondents were edgebanders, finishing equipment, shapers, moulders and dust collectors. A few also cited planers, jointers, veneering equipment, lathes, software and material handling.

As to when the economy will make a significant recovery, virtually no one expects a turnaround during the first quarter of 2009. However, 20% foresee an upturn in the second quarter and 20% see it coming in the third quarter. Only 8% look for a recovery in the fourth quarter and the majority, 36%, do not expect things to get better until 2010. Almost 15% think it will be 2011 or beyond before there is marked improvement.

Respondents were candid when asked if they had any additional comments about the outlook for their companies in 2009. Many echoed the feelings expressed by a residential furnituremaker, who said, “It’s going to be a tough road for a while.” A number of respondents also said they are watching every facet of their business operations and/or implementing lean procedures to reduce costs, waste and inefficiencies.

A large residential furniture company said, “We are looking at every facet of our business and operating processes within our company model.”

“We are intensifying our marketing efforts and tightening up our internal controls to minimize mistakes,” said a commercial cabinet manufacturer. There also were several notes of optimism from companies that are doing well. One cabinet shop said, “In spite of the downturn, I have had more consistent work in the last two quarters of 2008 than I have ever had since I started my business.”

“Despite the economy, business has been increasing and I have booked more business for the first quarter of 2009 than I did for 2008,” said an architectural woodworker.

A couple of respondents gave credit to careful planning for their ability to survive. “Our position in the marketplace was determined long ago by our strategic planning, and that has helped us immensely,” said one large millwork firm. “We are not reacting to outside forces nearly as much as prior recessions, but are carrying out the plan as outlined. The attitude is much more positive, in that there is no doubt we will weather the economic storm and be a major force in our market.”

One cabinet company respondent summed up the feelings of many in the survey, however, by saying simply, “Our fingers are crossed for good luck!"