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US Office Furniture Industry index dips in 1st quarter of 2013

Monday 29 April 2013

"The industry can be described in one simple word FLAT!," said Mike Dunlap. "Given current economic conditions, I think this in not bad news. The Overall Index continues to remain above 50 and is definitely in line with previous 1st quarter survey index values I think that the industry is still on solid ground, in spite of some lower indicators."
The April 2013 survey highlights are:
• Gross Shipments dropped to 49.45, significantly lower than the 36 Survey average of 57.57 and Order Backlog recorded 51.27, which is also significantly lower than the 36 Survey Average of 56.45.
• The Employment Index rose to 51.82 nearly even with the 36 Survey average of 51.69. The Hours Worked Index declined to 52.88 and is below the 36 Survey average of 55.53.
• The Capital Expenditures fell to 54.72 and Tooling Expenditures also rose to 57.36. These compare to their 36 Survey averages of 55.33 and 55.60.
• New Product Development rose to 65.74 well above the 36 Survey average of 63.41.
• Raw Material Costs remain nearly unchanged at 46.15, but is much better than the 36 Survey average is 43.81. Employee Costs dipped to 43.85. The 36 Survey Average is 46.88.
• The Personal Outlook Index slipped from 59.20 to 54.73 and is below the 36 Survey average of 56.31.
Dunlap stated, further The declines in both Gross Sales and Order Backlog index values are "somewhat surprising, as both had improved during the third quarter of 2012 I think that Super Storm Sandy and significant declines in government sales had significant influence during this quarter."
Employment Levels and Hours Worked index values also fell for the same reason. Both manufacturers and suppliers appear to be affected equally.
"The modest decline in Capital Expenditures, improvements in Tooling Expenditures and New Product Development are mixed when compared to their 36 survey averages, which is disconcerting. The rise in New Product Development is typical during the 1st quarter. The Raw Material Cost and Employee Cost index values are always a concern and rarely show much improvement, let alone rise above 50.00," said Dunlap.
"I am disappointed to see the decline of the index in Personal Outlook."
The most frequently cited perceived threats to the industry's success are healthcare costs, transport costs, energy costs, exchange rates, 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.
"Over 63% 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, This is the 36th MADA / OFI Trends Survey. We started conducting it in August 2004. The continued flatness in the Overall Index reflects the quarterly performance of the major manufacturers that the industry remains on flat, but solid ground.
"I hold the opinion that the industry will see some slow growth period during the next two quarters of 2013, then see a modest acceleration during mid to late 2013 and into 2014. The April 2013 MADA / OFI Trends survey was sent to more than 750 individuals involved with office, education, healthcare, and hospitality 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 2013," concluded Dunlap.
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.

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