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Sunday, 10 May 2015 22:00

Office furniture sector continues on growth path ahead of NeoCon

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The latest sales figures and a quarterly activity index show the office furniture industry on strong footing heading into next month’s NeoCon trade show in Chicago.

Two key players, Knoll Inc. and HNI Corp., both reported strong sales growth in the first quarter for their furniture divisions.

Across the entire industry, the April activity index from Michael A. Dunlap & Associates LLC registered a 56.80 on a scale of zero to 100. That compares to a 57.26 in January and a 57.58 six months ago. The April index was also the third best recorded since July 2007.

“The industry continues to move on a very steady and a solidly improving trend line,” Michael Dunlap said. “We re-affirm our prediction that the industry remains on course to achieve its best year in more than a decade.”

Based on surveys with executives at furniture makers and suppliers, the index gauges activity in 10 categories. Three of the 10 indexes improved in April and seven declined with “minor adjustments,” Dunlap said.

One improvement for the April index came in new product development, which registered an all-time high of 69.70. The personal outlook among executives declined to 64.58 in April from 66.32 in January but remained well above the average of 57.48 since Dunlap started the quarterly survey in 2004.

Dunlap termed the April declines in a number of individual indexes as “not very significant,” since they have each been improving since the first half of 2013, remained strong to end 2014 and “reflected a pattern of solid improvement” in the first quarter.

“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 said.

At both Knoll and HNI, office furniture sales grew by double digits in the first quarter.

The East Greenville, Pa.-based Knoll, which has production facilities in Grand Rapids and Muskegon, reported quarterly sales of $167.7 million for its furniture division, a 14.7-percent increase from the same period a year earlier.

Muscatine, Iowa-based HNI reported office furniture sales of $407.4 million for the quarter, a 13.7-percent increase. The North American contract furniture business alone grew 15 percent, CEO Stan Askren said.

HNI projected sales growth of 8 percent to 12 percent for office furniture in the present second quarter.

“Our office furniture market momentum is strong, and we project continued growth across all channels,” Askren said in a conference call with brokerage analysts to discuss quarterly results. “Our view is the momentum of the market will continue and actually we’ll improve over where we’re at.”

Locally, Steelcase Inc. and Herman Miller Inc. report their latest quarterly sales and earnings results shortly after NeoCon, which runs June 15-17 in Chicago.

The most recent outlook for the industry issued in late February by the Business and Institutional Furniture Manufacturers Association projected a 4.5-percent increase in shipments this year to $10.2 billion, followed by 6.4-percent shipment growth in 2016 to $10.9 billion.

Read 2141 times Last modified on Sunday, 10 May 2015 21:04

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