The Business and Institutional Furniture Makers Association International updated its November 2001 forecast, preferring to look toward second quarter than the current short-term period, which remains bleak. Business hiring activity reports released by Manpower of Kent County also project labor market improvements for the second quarter.
BIFMA cited further declines in service sector employment, which was particularly hard hit at the close of 2001, and showed signs of further decline in the first quarter of 2002. Office vacancy rates also climbed sharply. The not-for-profit trade association now indicates declines will culminate in a 13 percent drop in annualized industry shipments in 2002, up from November projections of 8.8 percent. Furniture industry shipments declined more than 17 percent in 2001.
While demand for office furniture is expected to remain weak for the first quarter, a slow recovery is projected to begin by the end of the second quarter. Further, BIFMA forecasts that current signs of economic recovery will spur steady improvement in furniture orders through the remaining year. BIFMA Executive Director Tom Reardon noted in his report that year-over-year growth rates for furniture orders and shipments will turn positive by fourth quarter 2002 and grow by 3.6 percent in 2003.
Steelcase, the world’s leading office furniture manufacturer, earlier this month issued an earnings warning, anticipating a 35 percent decrease in revenues for the quarter ended last Friday, Feb. 22.
Herman Miller did not change its earlier earnings guidance of a 6-to-10 cent per share loss for the quarter. Previous quarter revenues declined 35.9 percent for the period ending Dec. 1, 2001.
In related news, Manpower of Kent County found in its latest poll that hiring among all businesses was more likely in the service sector and non-durable goods manufacturing during the second quarter. (See related story).