Office Furniture Orders Up 13%

New York, NY, August 3, 2007--Office furniture orders rose 13% in June, bucking a trend of slower growth, according to industry data released on Thursday.

The Business and Institutional Furniture Manufacturers Association said June orders had increased to $1.22 billion from a year earlier. Shipments rose 5% to $1.05 billion.

The strength in orders stands in contrast to the industry's performance since January, when they fell for the first time since July 2004. Excluding the June numbers, monthly orders so far this year have shown an average decline of about 5% year-over year.

"The June data were surprisingly robust, and support the view that while growth is decelerating to a more moderate pace, an industry downturn is unlikely," Raymond James analyst Budd Bugatch said in a research note.

Office furniture's primary economic drivers, such as corporate profits, nonresidential construction, office vacancy rates and service sector employment, remain largely intact, Bugatch said.

However, the industry will probably settle at a growth rate between 3% and 6%, tracking the gross domestic product, Bugatch said.

Despite the June numbers, Bugatch said the industry wouldn't return to the double-digit growth rates enjoyed during the boom years of 2004 and 2005 without a new, widely adopted innovation, such as the cubicle.

The furniture manufacturers' association compiled its June report from 40 companies, which account for about 73 % of the industry's volume.