Michael A. Dunlap & Associates, LLC unveils the results of its quarterly MADA / OFI Trends Survey, a unique tool that measures the current business activity of the commercial furniture industry and its suppliers. This survey was completed during the month of January 2015. This edition marks the 42nd Edition, which was started during the summer of 2004.
The survey focuses upon ten key business activities, with respondents rating each area on a scale of TEN (the highest) to ONE (the lowest). The business activities are 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 unique element of this survey is the establishment of an Industry Index Number to quantify where the industry is currently performing. For example, an index of 100 means that things “couldn’t be better”, an index of ONE is “absolutely the worst” it can be, and an index of 50 means it is neutral; no change “up” or “down”.
The January 2015 Overall Survey Index is (57.26) and is the second best since July 2007 (58.49) and compares to October (57.58). The highest recorded Index was 59.72 in July 2005; the lowest was 41.45 in April 2009. The average overall index is 54.51.
“The industry continues to move on a very steady and improving trend line. This is good news. The Overall Index continues to remain well above “50” and is definitely above the 42 Survey average. We are confident that the industry is still on course to achieve it’s best year in more than a decade.” Mike Dunlap commented.
The January 2015 survey highlights are:
* Gross Shipments Index of 60.26 and is significantly higher than the 42 Survey Average of 57.63. The Order Backlog Index of 56.05 and is very close to the 42 Survey Average of 56.72.
* The Employment Index of 55.79 is steady compared to 55.61 In October, is well above the 42 Survey Average of 52.08. The Hours Worked Index was 58.33 compared to 59.47, well above the 42 Survey Average of 55.38.
* The Capital Expenditures rose to 58.06 compared to 53.42 in October but Tooling Expenditures slipped to 57.78 compared to 58.46 in October. These compare to the 42 Survey Averages of 55.38 and 55.75.
* New Product Development dropped to 64.06 compared to the all time high of 66.41 in October above the 42 Survey Average of 63.44.
* Raw Material Costs improved to 49.71 compared to 45.13 in October, well above the 42 Survey Average of 44.35. Employee Costs improved to 45.28 compared to 44.25 in October. The 42 Survey Average is 46.74.
* The Personal Outlook Index rose to 66.32; the highest recorded since the survey started in 2004. This compares to 64.15 in October and 62.22 and is well above the 42 Survey averages of 57.30.
Dunlap further stated “The declines in Gross Sales and Order Backlog index values are not very significant. Both have been improving since the first half of 2013, but the large increases we saw during the 3rd quarter are not a common occurrence. The 4th quarter remains strong. They still reflect of a pattern of solid improvement. The Employment Levels and Hours Worked index values remain very steady and are indicative signs that hiring new employees is keeping up with demand with overtime.
“The modest changes in Capital Expenditures and Tooling Expenditures are mixed when comparing them to their 42 survey averages, New Product Development remains strong. Both manufacturers and suppliers continue to report similar experiences.
“The improvements in Raw Material Cost and Employee Cost index values are nice to see, but not unusual. They rarely show much improvement."
He added, "I am thrilled to see the strength of the index in Personal Outlook Index.”
The most frequently cited perceived threats to the industry’s success are healthcare costs and the costs of materials. The costs of materials and healthcare are the most commonly cited concerns from respondents since this survey process was started in August 2004.
Dunlap again thanked the respondents with this comment. “Over 75% of the responses came from executives who are the Chairman, CEO, COO or President of their organizations. I am always extremely grateful for their participation and support. Their suggestions and recommendations are crucial to the performance and improvement to this unique survey.”
“Five out of ten Index values have improved and five declined and those that went down were minor adjustments. Only Material Costs and Employee costs are below the ‘50’ level. We maintain the opinion that the industry will continue to accelerate during the first and second quarters of 2015 and that 2015 will finish strong."
The January 2015 MADA / OFI Trends survey was sent to more than 750 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 2015.
Michael A. Dunlap & Associates, LLC, is a consulting firm that focuses upon issues involving the working, learning, healing, and hospitality environments and furniture industries.
These include strategic business and market planning, furniture industry trends, Market Entry, Global Partnerships, & Collaboration, Author, Presenter, & Speaker, Mergers, Acquisitions, & License Agreements, Expert Witness Services in Products Liability, and Independent Rep Sales Team Development.
Source: Michael A. Dunlap & Associates
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