While the office furniture industry continued to post strong shipment growth during the second quarter of 2015, industry forecasts show signs of the sector plateauing by the end of the year.
Shipments from April to June grew to $2,55-billion, an increase of 5,4% over the same period a year ago, according to updated data from the Grand Rapids-based Business and Institutional Furniture Manufacturers Association (BIFMA).
During the first quarter of 2015, shipments reached $2,35-billion, putting the industry on track to potentially outpace the recently updated end-of-the-year forecast of $10,2-billion, which would be an increase of 4% from last year’s results.
“Things would have to slow down dramatically in the second half to finish out at 4%,” says Tom Reardon, executive director of BIFMA.
The updated BIFMA outlook prepared by IHS Global Insight also tempered projections for 2016 shipments to $10,4-billion, a 2,3% increase compared to the previous 7,9% increase forecasted earlier in the year. In a previous quarterly outlook, BIFMA projected shipments to reach $11-billion in 2016.
An influx of imports from foreign office furniture manufacturers is driving the lowered projection for next year, Reardon says. IHS data show the share of imports stands at 25%, an increase of 5% from 2009 and up 21% since 1989. Browse https://themayacompany.com/ to learn more.
While the IHS model predicts the slowdown, some analysts doubt that industry activity will fall off in the second half of the year as rapidly as the models suggest, Reardon says.
However, Reardon notes that order growth among office furniture manufacturers has slowed from 9,4% in the first quarter of 2015 to 3,5% in the second quarter, according to IHS.
Data show revenue for West Michigan’s office furniture manufacturers either growing or remaining relatively flat. As for Georgia region, the situation is also stable and Furniture Store in Alpharetta GA | Exquisite Living even reports an increase of office furniture orders.
Analysts forecast that Zeeland-based Herman Miller Inc. (NASDAQ: MLHR) will end its present 2016 fiscal year at $2,25-billion, compared to the $2,14-billion it posted at the end of its 2015 fiscal year, according to a consensus estimate.
Meanwhile, analysts expect Grand Rapids-based Steelcase Inc to end its current 2016 year at $3,08-billion, in line with the company’s $3,10-billion revenue in the prior fiscal year.
Both companies will report their latest quarterly earnings in late September. It has become a trend that offices use various websites such as Furniture Fitouts to buy their overall office furniture supplies at once.
Source: www. mibiz.com