The comeback continues

According to figures recently released by the Business and Institutional Furniture Manufacturer's Assn. International (BIFMA), production of U.S. office furniture is expected to come in at about $11.4 billion for 2007, an increase of 5.2 percent over 2006.

While the gain may be modest, it represents a rebound in an industry that was hit hard a few years ago. "We had three years of decline, and we are now in our fourth year of recovery," says Tom Reardon, BIFMA executive director. "However, we're still not back to our high-water mark of 2000."

Projections for next year indicate there may be a leveling off and perhaps even a slight decline for the industry in the neighborhood of about 0.6 percent. Nonetheless, diversification and environmentally friendly initiatives are giving many reason to be hopeful.

Some optimism

Reardon feels that there are reasons to be optimistic. "To date, there are three primary drivers that we've been able to identify for furniture volume: white collar employment service sector employment growth, corporate profitability and new office construction. For the last couple of years, all three of those factors have been trending higher. Corporate profits have been strong over the last several years, white collar employment continues to grow moderately and office building construction has been in recovery mode from earlier in the decade."

New markets

Although Reardon notes that BIFMA focuses on office furniture and office environments, he says he can't help but notice that there are some BIFMA members who are looking at diversifying, specifically into the healthcare area.

"Certainly the demographics show that healthcare is going to be a growing market," Reardon observes. "We've got the aging of the bulk of our population, and there's going to be increased demand for that. Several companies that have historically focused their energy on office furniture are diversifying their product lines into this area."

Challenges and opportunities

"Overall, the biggest challenge we're facing is the economic one, given some of the uncertainties we're seeing," Reardon says. However, he is quick to point out opportunities he sees, in particular citing the interest in and movement toward "green" buildings.

According to Reardon, BIFMA is currently working on its own standardized method of evaluating what is "green." BIFMA's approach is to take a holistic view of sustainability, which includes a "triple bottom line." A triple bottom line includes environmental impact, economic impact and social impact.

"The market dynamic has driven our association to try to develop a standardized method of evaluating what is green, because it can mean a lot of different things to a lot of different people and it is so multi-faceted," Reardon says. "The whole sustainability movement is a tremendous opportunity and growing."

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About the author
Ken Jennison

Ken Jennison was a senior editor at CabinetMaker and FDM magazines from 2006 to 2008, writing more than 70 articles about cabinet and furniture manufacturers. He is currently director of acquisitions at Hearland Historical Properties LLC in San Francisco.