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 July 2014. This edition marks the 40th 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 July 2014 Overall Survey Index is (55.62), which is significantly higher compared to April 2014 at (54.6), and January 2014 at (54.36). The highest recorded Index was 59.72 in July 2005; the lowest was 41.45 in April 2009. The average overall index is 54.37.
“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 40 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 July 2014 survey highlights are:
* Gross Shipments jumped to 61.96 from 53.48 in April and is significantly higher than the 40 Survey Average of 57.36 and Order Backlog also rose to 62.89 from 56.12 in April, well above than the 40 Survey Average of 56.60.
* The Employment Index of 54.22 is well above the 40 Survey Average of 51.90 The Hours Worked Index declined slightly to 53.41 and is slightly below the 40 Survey Average of 55.21.
* The Capital Expenditures slipped to 54.32 and Tooling Expenditures rose to 56.82. These compare to their 40 Survey Averages of 55.36 and 55.64.
* New Product Development improved to 64.19, above the 40 Survey Average of 63.35.
* Raw Material Costs improved significantly to 46.36,much better than the 40 Survey Average of 44.20. Employee Costs improved to 44.50. The 40 Survey Average is 46.83.
* The Personal Outlook Index rose from 60.80 in April to 62.22 in July and is well above the 40 Survey averages of 56.90.
Dunlap further stated “The increases in Gross Sales and Order Backlog index values are very significant. Both have been improving since the first half of 2013, but these larger increases are not a common occurrence. They are on very solid path to improvement. The shifts in Employment Levels and Hours Worked index values are additional positive signs that hiring new employees is offsetting overtime."
“The modest changes in Capital Expenditures and Tooling Expenditures are mixed when comparing them to their 40 survey averages, New Product Development remains strong. Both manufacturers and suppliers are reporting similar experiences."
“The improvements in Raw Material Cost and Employee Cost index values are always a welcome sign that cost controls are working. They rarely show much improvement."
He added, "I am delighted 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 (steel and wood), 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 61% 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.”
Dunlap continued, “We are thrilled to celebrate the milestone of the 40th MADA / OFI Trends Survey. We started conducting it in August 2004. The continued improvements in the Overall Index is a welcome sign. It confirms that the industry is continuing to grow and albeit slowly and steadily.
“Eight out of ten Index values have improved and only 2 declined. Only Material Costs and Employee costs are below the ‘50’ level. We maintain the opinion that the industry will continue on its steady growth in mid 2014, then accelerate during late 2014 into early 2015."
The July 2014 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 October 2014.
Source: Michael A. Dunlap & Associates
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