Its Growing But Slowing
GRAND RAPIDS — The office furniture industry is continuing its sales growth, but the pace is slowing. So said a June 2 industry brief by Budd Bugatch, an analyst with financial services firm Raymond James. The report was based on the firm's research, as well as the findings of a June 1 report released by the Business and Institutional Furniture Manufacturers Association (BIFMA).
Both new orders and shipments were up in April (2 percent and 17 percent, respectively) compared to 2004 figures. Those figures were down from March, however, when orders were up 12 percent over the same period in 2004, and deliveries were up by 14 percent.
In other words, furniture manufacturers were able to play more catch-up in April, with industry backlogs falling by 1 percent.
"The contract office furniture industry continues to move ahead, posting positive growth in orders, shipments and backlog," Bugatch wrote in his analysis. "Although there appeared to be some moderation in the rate of growth, one month's data is not enough to sway our belief that the industry remains in a mode of pronounced growth. Office furniture demand is by most accounts strong and momentum is positive."
Bugatch pointed out that April has historically been a crueler month for orders and shipments, with that month's orders running an average of 5.6 percent lower than March. Nonetheless, he expressed a suspicion that the rate of growth in the industry may be slowing, questioning whether the lower April numbers represent an "early sign of deceleration."
Mike Dunlap, an industry consultant with West Olive-based Michael A. Dunlap & Associates, doesn't think so.
"The 'April slip,' if you will, I don't consider to be the beginning of a trend," he said. "I have a hard time taking one month and saying it's going to be a trend."
Dunlap admits that reviewing the May and June order and delivery numbers, as well as talking to industry experts at the NeoCon tradeshow, might change his mind, but he currently doesn't expect a slow-down in the near future.
"From the beginning of April 2004, we've seen nothing but improvements," he said. "Right now, I just don't see anything that really worries me."