Seating, health care, education lead recovery

The office and contract furniture segment of the industry may be the most closely measured. And one close observer of that segment is optimistic about 2011.

“After a disastrous 2009, the industry began a modest recovery in late spring of 2010 but the improvements are led by gains in the health care and higher education markets,” Mike Dunlap of Michael A. Dunlap & Associates, LLC told CabinetMakerFDM recently.

“The office markets are still trailing and won’t see significant improvements until the employment picture improves. Without new jobs, there is little need for new furniture,” he said.

Dunlap’s firm expects to see 12 to 13 percent improvement industrywide with healthcare and higher education leading the way. Seating seems to lead any recovery after a recession, Dunlap said, and he doesn’t expect 2011 to be an exception. Lounge products and mobile, adjustable tables will see strong growth in 2011.

In putting together the FDM 300 for 2010, we saw some large declines in sales, especially from companies that had their fiscal year end early in 2010.

Dunlap’s company’s most recent quarterly MADA/OFI Trends Survey indicated that trends were positive for the office furniture industry. The survey was completed in January 2011 and showed an index of 57.01, which is the highest since the July 2007 Index of 58.49.

Dunlap told CabinetMakerFDM that he believes that increases in capital expenditures, product development, and personal outlook are the key indicators of industry growth. There are still some clouds on the horizon. Although material costs and employee costs appear to be stable, there is risk that both could get out of control. And energy costs and other economic factors make the recovery a bit fragile.


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About the author
Karl Forth

Karl D. Forth is online editor for CCI Media. He also writes news and feature stories in FDMC Magazine, in addition to newsletters and custom publishing projects. He is also involved in event organization, and compiles the annual FDM 300 list of industry leaders. He can be reached at [email protected].