Haworth showroom.
Haworth showroom.

HOLLAND, Mich. – Commercial furniture manufacturers are continuing to see sales growth, but that expansion is slowing.

Michael A. Dunlap & Associates, LLC recently announced the results of its April 2017 Quarterly MADA / OFI Trends Survey, which measures the current business activity of the commercial furniture industry and its suppliers.

“The industry continues to grow but at a much slower pace. The Overall Index is strong and remains above the 54.79 Survey average. 2016 was the best year the industry has seen in well over a decade. We remain confident that 2017 will exceed 2016.” Mike Dunlap said.

This survey was completed during the month of April 2017 and marks the 50th Edition. The survey was started during the summer of 2004. The survey focuses on ten key business activities and respondents rate each area on a scale of 10 (the highest) to 1 (the lowest). These include gross shipments, order backlog / incoming orders, employment levels, manufacturing hours (overtime vs. reduced hours), capital investment, tooling expenditures, new product development activity, raw material costs, employee costs, and the respondents’ personal outlook on the industry.

The survey employs an Industry Index Number to quantify where the industry is currently performing.

The April Overall Survey Index is 55.41 compared to an almost identical January 2016 Overall Index of 57.25 and exceeding October 2015’s (56.05). The 50 survey average for the overall index is 54.89.

The April 2017 survey highlights are: gross shipments index is 50.13 after an all-time high of 64.85 in October 2014 and an all-time low of 41.40 in July 2009. The 50 survey average is 57.89. The order backlog index is 61.00. The 50 survey average is 57.89. The relatively low gross sales index is offset by the higher backlog index, s many projects during the 1st quarter have been pushed out into the 2nd or 3rd quarters.
The Employment Index is 53.04. The 50 survey average is 52.45.
The Capital Expenditures is 64.50. Tooling Expenditures is 66.00. These compare to the 50 survey averages of 55.89 and 55.21. Although somewhat higher than previous years, these Index values tend to be cyclical from 4th to 1st quarters due to new products being prepared for NeoCon.
New Product Development is 63.91. The 50 survey average is 63.45. After some weaker quarters, this has bounced back.
Raw Material Costs index is 43.48. The 50 survey average is 45.01. When economies grow and gain strength, raw materials prices go up. It is a simple economic reality.
Employee Costs is 43.33. The 50 survey average is 46.58. Much like material costs, as an economy approaches full employment, wages, benefits, and other costs increase.
The Personal Outlook Index is 63.91. The 50 survey average is 58.33. The Personal Outlook Index has remained above the average since January 2014. The Median Value is 61.06, which reinforces the strength of this indicator.

Dunlap stated, "Although some think this slowdown is an indicates a general decline in the industry performance, at MADA, we disagree. Where there are declines, they are offset by a companion index, I am still pleased to see the strength of the Personal Outlook Index. It’s a purely emotional question but we put a lot of value on this content.”

The most frequently cited perceived threats to the industry’s success are material costs, healthcare costs, and energy costs. Healthcare costs are the most commonly cited concern from respondents since this survey process was started in August 2004.”

The April 2017 MADA / OFI Trends survey was sent to more than 500 individuals involved with the commercial furniture industry’s 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 $1.0 million in sales. For further information, contact: Mike Dunlap at 616-786-3524, [email protected], http://www.mdunlap-associates.com

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