March Office Furniture Orders Slowing

Grand Rapids, MI, May 3, 2007–Office furniture orders slowed in March, reflecting the limitations of February’s short-term rebound when orders rose 14 percent, an analyst said.

“Month-to-month volatility aside, industry demand has unquestionably moderated over the past several months,” Raymond James analyst Budd Bugatch wrote in a research note.

March orders grew 3 percent year-over-year to $945 million, the Business and Institutional Furniture Manufacturers Association (BIFMA) said.

Shipments rose 8 percent to $10.96 billion, averaging about 5 percent growth for the first three months of 2007 compared with a 10 percent average for the first three months of 2006.

In 2004 and 2005, Steelcase Inc., Herman Miller Inc. and Knoll Inc. thrived on order increases into the low double-digits in percentage terms.

But the industry is cooling and will likely settle at a 3 percent to 6 percent growth rate that tracks the GDP in the absence of a noneconomic driver, like the adoption of a new technology such as the personal computer, Bugatch said.

BIFMA compiled its March report from 40 companies, which account for about 73 percent of the industry’s volume.