WEST OLIVE — In its fifth release of the quarterly MADA/OFI Trends Survey, Michael A. Dunlap & Associates LLC is trumpeting the strongest commercial furniture industry since the survey’s inception.
“The survey confirms that the industry continues on a solid road to recovery,” said Mike Dunlap. “The higher costs of materials we’ve been experiencing have been diminishing and increased product development, capital, and tooling expenditures are all great signs.”
The survey focuses on 10 key business activities, with respondents rating each area on a 10-point scale. From this, the survey produces the Industry Index Number, used to quantify where the industry is currently performing. The highest possible value for the index is 100. A score of 50 designates average confidence, while 1 would represent the absolute lowest state of the industry.
The index number of July was 59.72.
Previous index numbers were:
- April 2005: 56.04
- January 2005: 57.55
- October 2004: 56.16
- August 2004: 57.37
Nearly 80 percent of respondents indicated continued fears of low-cost Asian competition, high health-care related costs, fuel costs and the declining value of the dollar.
Gross shipments of office furniture and supplies to the industry have jumped to 66.05, up from 62.65 in April, but slightly below the 66.34 recorded in January.
Order backlog and incoming orders hit 65.54, beating the 60.67 in April.
Employment levels remain steady at 54.67, compared to 54.65 and 54.70 the previous two quarters.
Hours worked, however, leaped to 63.95, surpassing the previous high index in October 2004’s 60.94.
Capital expenditures rebounded significantly to 58.22, reversing a declining pattern over the past 12 months. April’s index was 53.26.
Tooling expenditures increased proportionately, rising to 60.14 from 56.85 in April.
New product development activities continue to increase each quarter, rising to 67.60, the highest index rating in the survey.
Raw material costs have improved dramatically, up to 48.63 from 34.12 in August 2004.
Employee costs have improved slightly to 47.97, still unable to rise above 50.
There is enthusiastic support for the industry, as the personal outlook index is 63.54, slightly lower than 63.97 in January but up from 62.43 in April.
Over 48 percent of the responses are from top management, such as chairman, CEO, COO or president.
Responses came from Asia, Europe, India and North America, and from companies ranging in sales from over $1 billion to less than $10 million.
The survey will be repeated in October.