by Brianna Crandall — May 6, 2015—Michael A. Dunlap & Associates consulting firm unveiled last week the results of its quarterly MADA/OFI Trends Survey, which measures the current business activity of the commercial furniture industry and its suppliers. This survey was completed during the month of April 2015. This marks the 43rd edition of the survey, which was started during the summer of 2004.
The survey focuses upon ten key business activities, with respondents rating each area on a scale of 10 (the highest) to 1 (the lowest). The business activities are Gross Shipments, Order Backlog / Incoming Orders, Employment Levels, Manufacturing Hours (Overtime vs. Reduced Hours), Capital Investment, Tooling Expenditures, New Product Development Activity, Raw Material Costs, Employee Costs, and the respondents’ Personal Outlook on the industry.
According to the firm, the unique element of this survey is the establishment of an Industry Index Number to quantify where the industry is currently performing. For example, an index of 100 means that things “couldn’t be better,” an index of 1 is “absolutely the worst” it can be, and an index of 50 means it is neutral—no change “up” or “down.”
The April 2015 Overall Survey Index (56.80) is the third best since July 2007 (58.49) and compares to January 2015 (57.26) and October 2014 (57.58). The highest recorded Index was 59.72 in July 2005; the lowest was 41.45 in April 2009. The average overall index is 54.56.
“The industry continues to move on a very steady and a solidly improving trend line. This is very good news! The Overall Index continues to remain strong and is well above 50. It is definitely above the 43 Survey Average. We reaffirm our prediction that the industry remains on course to achieve its best year in more than a decade,” commented owner and principal Mike Dunlap.
The April 2015 survey highlights are:
- The Gross Shipments Index is 58.48, higher than the 43rd Survey Average of 57.65. The Order Backlog Index of 55.45 and is slightly lower than the 43rd Survey Average of 56.69.
- The Employment Index of 53.03 is well above the 43rd Survey Average of 52.18. The Hours Worked Index was 55.00, nearly equal to the 43rd Survey Average of 55.37.
- The Capital Expenditures slipped to 57.88 compared to 58.06 in January, and Tooling Expenditures were steady at 57.57 compared to 57.78 in January. These compare to the 43rd Survey Averages of 55.44 and 55.79.
- New Product Development soared to 69.70 compared to the previous all-time high of 66.41 in October 2014 and well above the 43rd Survey Average of 63.58.
- Raw Material Costs improved to a neutral 50.00 compared to 49.71 in January and 45.13 in October, well above the 43rd Survey Average of 44.47. Employee Costs improved to 48.94 compared to 45.28 in January 2015 and 44.25 in October 2014. The 43rd Survey Average is 46.72.
- The Personal Outlook Index is 64.85. The January 2015 index was 66.32, the highest recorded since the survey started in 2004. This compares to 64.15 in October and is well above the 43rd Survey Averages of 57.48.
Dunlap added, “The most frequently cited perceived threats to the industry’s success are healthcare costs and the costs of materials. The costs of materials and healthcare are the most commonly cited concerns from respondents since this survey process was started in August 2004.”
“Three out of ten Index values have improved and seven declined, and those that went down were minor adjustments. Only Employee costs are below the 50 level, and Material Costs were neutral at 50.00. We maintain the opinion that the industry will continue to accelerate during the second and third quarters of 2015 and that 2015 will finish strong into 2016.”
Dunlap again thanked the respondents, many at the top levels of their organizations, for taking the time to respond to the survey. The April 2015 MADA/OFI Trends survey was sent to more than 800 individuals involved with office furniture manufacturing and suppliers from Africa, Asia, Australia, Europe, North and South America and from companies ranging from more than $1 billion in sales to less than $10 million in sales. The survey repeats in July 2015.
