HOLLAND, Mich. - The office furniture industry continues to show modest improvement through July, according to a quarterly survey of more than 700 domestic and international office furniture manufacturers and suppliers, conducted by Michael A. Dunlap & Associates LLC.
The overall index score for July was 56.03, indicating “the industry continues to grow steadily," said Mike Dunlap of the Holland, Michigan-based consulting firm. "The smaller to mid-sized companies are growing faster than the Top Five. The Overall Index is strong and is definitely above the 54.82 Survey average. 2015 was the best year we had seen in well over a decade and we remain confident that 2016 will be even better.”
The MADA/OFI Trends Survey, the 48th by Dunlap, assigns ratings for 10 key business activities: Gross Shipments, Order Backlog/Incoming Orders, Employment Levels, Manufacturing Hours, Capital Investment, Tooling Expenditures, New Product Development Activity, Raw Material Costs, Employee Costs and Personal Outlook.
Rankings are from 1 (worst) to 100 (best), with 50 signifying “neutral” or no change. According to the survey, gross shipments rose from April to 58.95, after an all-time record of 64.33 in January 2016. The 48 survey average is 57.94. The survey also found a strong Order Backlog Index of 63.33; the survey average is 57.03.
The Employment Index dropped to 53.42, slightly lower than the survey average of 52.40. The Hours Worked Index of 57.78 dipped slightly from 58.28 in April, though still higher than the 48 survey average of 55.65.
“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 not being offset by less overtime," Dunlap said.
Capital expenditures and tooling expenditures dipped slightly compared to the sharp decline in raw materials. “The sharp drop in the Raw Material Cost Index appears to be a market correction in the prices of commodities like fuel, steel, copper, and plastics. It's actually [a] 'deflation' scenario that is typically good only for a short period."
Dunlap added, "Three out of ten Index values have improved and seven have declined, but these are simple corrections in the industry’s performance. Only Materials and Employee costs are below the ‘50’ level. We maintain the opinion that the industry will continue to grow steadily during mid- 2016 and probably into 2017."
The next survey is set for October.
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