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 April 2015. This edition marks the 43rd 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 April 2015 Overall Survey Index is (56.80) and is the third best since July 2007 (58.49) and compares to January 2015 (57.26) and October 2014 (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 54.56.

“The industry continues to move on a very steady and a solidly improving trend line. This is very good news! The Overall Index continues to remain strong and is well above “50”. It is definitely above the 43 Survey average. We re-affirm our prediction that the industry remains on course to achieve it’s best year in more than a decade.” Mike Dunlap commented.

The April 2015 survey highlights are:

* Gross Shipments Index of 58.48 and is higher than the 43 Survey Average of 57.65. The Order Backlog Index of 55.45 and is slightly lower than the 43 Survey Average of 56.69.

* The Employment Index of 53.03 is well above the 43 Survey Average of 52.18. The Hours Worked Index was 55.00, nearly equal to the 43 Survey Average of 55.37.

* The Capital Expenditures slipped to 57.88 compared to 58.06 in January and Tooling Expenditures were steady at 57.57 compared to 57.78 in January. These compare to the 43 Survey Averages of 55.44 and 55.79.

* New Product Development soared to 69.70 compared to the previous all-time high of 66.41 in October 2014 well above the 43 Survey Average of 63.58.

* Raw Material Costs improved to a neutral 50.00 compared to 49.71 in January and 45.13 in October, well above the 43 Survey Average of 44.47. Employee Costs improved to 48.94 compared to 45.28 in January 2015 and 44.25 in October 2014. The 43 Survey Average is 46.72.

* The Personal Outlook Index is 64.85. The January 2015 index was 66.32; the highest recorded since the survey started in 2004. This compares to 64.15 in October and is well above the 43 Survey averages of 57.48.

Dunlap further stated “The declines in several index values are not very significant. All have been improving since the first half of 2013, and the large increases during the 3rd quarter of 2014 are not a common occurrence. The 4th quarter remained strong and the strength of the 1st Quarter of 2015 reflects 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.

“New Product Development is extraordinary at 69.70!. Both manufacturers and suppliers continue to report similar experiences. "I am thrilled to see the strength of the index in New Product Development Index.

He added, 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 58% 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.”

“Three out of ten Index values have improved and seven declined and those that went down were minor adjustments. Only Employee costs are below the ‘50’ level and Material Costs were neutral at 50.00. We maintain the opinion that the industry will continue to accelerate during the second and third quarters of 2015 and that 2015 will finish strong into 2016."

The April 2015 MADA / OFI Trends survey was sent to more than 800 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 July 2015.

Source: Michael A. Dunlap & Associates