HOLLAND, Mich. – The commercial furniture industry continues to grow steadily, according to the Michael A. Dunlap & Associates, LLC July 2018 Quarterly MADA/OFI Trends Survey.

“The industry continues to grow but at a nice, steady pace,” Mike Dunlap said. “The Overall Index is strong and remains well above the 57.13 Survey average. We remain confident that 2018 will exceed 2017.

“I feel good about where the industry is currently. 2018 will continue on the same path, but the current political uncertainties, mid-term elections, tariff and trade questions, and the resulting economic climates make predictions into 2019 very difficult.”

The quarterly MADA / OFI Trends Survey is a tool that measures the current business activity of the commercial (office, education, healthcare, and hospitality) furniture industry and its suppliers. This survey was completed during the month of July 2018 and marks the 54th Edition. The survey began in the summer of 2004.

The most frequently cited perceived threats to the industry’s success are tariffs, transportation and logistics costs, steel prices, and general material costs. Healthcare costs have been the most commonly cited concern from respondents since this survey process was started in August 2004.

The survey focuses on ten key business activities and respondents rate each area on a scale of 10 (the highest) to one (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 Gross Shipments Index for July 2018 index of 66.86 is an all-time high and is significantly above the 54-survey average. The previous all-time high and low were October 2014 65.85 and July 2009 41.40.

The July 2018 Order Backlog Index of 66.57 is also an all-time high and well above the 54-survey average and is remarkably very strong. Dunlap sees this as a positive indicator for industry sales for the 3rd and 4th quarters of 2018 and into the 1st Quarter of 2019.

The Employment Index measures the degree of increase or decrease in employment levels. The July 2018 Index 55.14 is well above the 54-survey average. In West Michigan and many other industry locations, labor shortages are driving up wages but increased hiring remains strong.

Historically, the Capital Expenditures Index has steadily been in the mid to upper 50's. The July Index of 54.12 is within recent ranges, but slightly lower than average. The all-time high was 64.74 in April 2017.

The Overall Index for the July 2018 Survey is 57.13, dampened by the Raw Materials Index. The 54-Survey Average Index is 54.98. The highest recorded Index was 59.72 in July 2005 and the lowest was 41.45 in April 2009 during the bottom of the recession.

Dunlap further stated, "Although some think the slowdown with some of the large public companies indicates a general decline in the industry performance, at MADA, we disagree, We are surveying many more than five or six companies. The growth is coming from the smaller under $50 million sales and fewer than 250 employees. 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 July 2018 MADA / OFI Trends survey was sent to more than 540 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 $500,000 in sales. The survey repeats in October 2018. For further information, please contact Mike Dunlap at 616-786-3524, e-mail: mike@mdunlap-associates.com, http://www.mdunlap-associates.com.

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