Business remains strong for the commercial furniture industry and its suppliers, according to the quarterly MADA / OFI Trends survey. The January 2016 overall survey index was 57.25, exceeding the October 2015 index, which was 56.05. Three index values in quarterly MADA/OFI survey reach record highs.

“The industry continues to improve and grow on a very steady and increasing trend line,” said Mike Dunlap of Michael A. Dunlap & Associates, LLC. “The overall index is strong and is definitely above the 54.74 survey average. “2015 was the best year we’ve seen in well over a decade and we are confident that 2016 will be even better!”

The January 2016 survey highlights are: Gross Shipments Index shot upwards to an all-time record of 64.33 after a drop to 59.33 in October 2015. The Order Backlog Index also rose to 59.00 compared to 57.00 in October. The Employment Index of 57.00 is another all-time record after 55.33 in October.                          

Also, the Capital Expenditures rose slightly to 55.33 from 55.17 in October. Tooling Expenditures slipped to 57.93 from October’s 58.52. But New Product Development rebounded to 61.33 compared to 57.93 in October; the lowest level since July 2009.

“This is puzzling, given the current state of the industry,” Dunlap said. “We will continue to monitor this in the next survey.”

The Personal Outlook Index is 61.03 down slightly from October’s 64.67, The all-time high was 66.40 in July 2016. The 46-survey average is 57.90.

Dunlap further stated “The fact that we have three all-time high index values in the January 2016 survey is very exciting! The high gross sales, employment, and material costs are strong indicators of the current firmness of the industry. The shifts in employment levels and hours worked index values are indicative signs that hiring new employees might be keeping up with demand and is still being offset by less overtime.

“The modest changes in capital expenditures and tooling expenditures are mixed when comparing them to their 45-survey averages, The New Product Development index is still alarming and we will monitor this closely during the next few weeks. Both manufacturers and suppliers continue to report similar experiences.

“The Raw Material Cost Index is extraordinary, but it certainly reflects the decline in commodities like fuel, steel, copper, and plastics. It’s actually a “deflation” scenario that is good only for a short period. With the four quarter average at 50.36 and 46-survey average of 46.88, conditions are out of balance. The employee cost index value is not unusual and is nearly equal to the 46-survey average

Dunlap added, "I am delighted to see the continued strength of the index in Personal Outlook Index.” It’s a purely emotional question and we put a lot of value on this content. The most frequently cited perceived threats to the industry’s success are healthcare costs and exchange rates. Healthcare costs are the most commonly cited concern from respondents since this survey process was started in August 2004.

“Five out of ten Index values have improved and five have declined, but these are simple corrections in the industry’s performance,” Dunlap said. “Only Employee costs are below the ‘50’ level. We maintain the opinion that the industry will continue to grow steadily during early 2016 and perhaps into 2017."

The January 2016 MADA / OFI Trends survey was sent to more than 700 individuals involved with office furniture manufacturing and suppliers from Africa, Asia, Australia, Europe, North and South America and from companies ranging from more than $1 Billion in sales to less than $10 Million in sales. The survey repeats in April 2016. For further information, contact: Mike Dunlap at 616-786-3524, e-mail: mike@mdunlap-associates.com, and www.mdunlap-associates.com.

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