Office furniture industry optimistic about business

HOLLAND, Mich. -- The office-furniture industry went through three years of plunging sales before 2004.

But this year, the outlook has improved, several industry insiders have said.

The better days continue, according to a recent survey by West Olive, Mich.-based industry consultant Mike Dunlap.

"We're certainly not in the downward cycle anymore," said Dunlap, who received survey replies from nearly 90 office furniture executives worldwide. "I think the survey really confirms what many people have been feeling."

Nearly 69 percent of those who responded said they had better shipment numbers in July than in either June or May. Seventy-eight percent of his survey's respondents showed at least some optimism for the industry's future, with less than 15 percent pessimistic.

In the same time, 36 percent of the companies increased their capital investments, while only 3 percent experienced drops, according to Dunlap's report.

"It demonstrates some confidence in the industry," he said.

About 40 percent of respondents said they had added workers in July, while more than 60 percent reported giving at least some overtime.

"The industry is being cautious to hiring new people, preferring to add overtime instead of adding new employees," Dunlap said.

Rising steel prices and other common materials like wood and oil caused concern. More than one-third of the respondents said raw materials increased between 5 and 10 percent in July compared to either of the previous two months.

The U.S. office-furniture market peaked in 2000 with $13.3 billion in shipments. Since then, shipments have dropped every year, falling to $8.5 billion last year.

But with improving employment and corporate profits, the Grand Rapids, Mich.-based Business and Institutional Furniture Manufacturer's Association is projecting 2004 numbers to reach nearly $9 billion. The industry group is projecting shipments to reach more than $10 billion next year.

Phil Todd, director of customer development at Holland-based Haworth Inc., said the future looks bright for the company and industry.

"Overall, the general economy is coming back," Todd said. "Our activity levels are up across the board. ... We are optimistic for the future."