GRAND RAPIDS, MI – The Business and Institutional Furniture Manufacturers Assn. (BIFMA) International recently released the latest quarterly forecast published by the economic consulting firm Global Insight. Worse-than-anticipated economic data for the fourth quarter of 2008 contributed to a more pessimistic outlook for office furniture consumption and shipments. The latest forecast predicts 2009 office furniture shipments will decrease 19% as compared to 2008 volumes. Orders are expected to decline 25%.
BIFMA says President Obama has inherited an economy contracting more sharply than at any time since the winter of 1981– 82. Rather than looking forward to a full recovery, consumers and businesses alike are searching for signs of moderation in the pace of the current slowdown. Office furniture consumption during the fourth quarter of 2008 dropped 7.3% compared to the same period in 2007, while shipments fell 6.7%. The decline in consumption was more than double previous expectations, and the decline in shipments came in 1.9% lower than previous expectations.
As 2009 and 2010 approach, there is little good news. Businesses will continue to be hampered by falling profits and consumers by falling employment. Real GDP fell 3.8% in the fourth quarter of 2008, and further steep declines are expected in the first half of 2009. The commercial and office sectors will be stalled by restricted credit and waning demand. As downturns in these sectors arrived late, their recoveries also will lag behind the general economy’s recovery by several quarters. Given the grim outlook, office furniture demand is expected to decline on a year-on-year basis throughout 2009 and begin to climb again during the second half of 2010.
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