Office Furniture Outlook Weakens for 2002, Gradual Improvement Expected in 2003

Furniture World News

BIFMA recently released the 3rd quarter, 2002 office furniture industry forecast prepared by the economic consulting organization, DRI-WEFA. The latest forecast downgrades the expectations for calendar year 2002, calling for an 18% decline in shipments to a level of just under $9 billion. Modest improvement is expected early next year with a 7% increase in shipments, to a level of $9.6 billion in 2003. A cautious corporate investment outlook and weak office construction will continue to restrain order and shipment volumes in the near-term. Economic consultants DRI-WEFA believe that corporate profits have bottomed out and expect them to rise steadily for the remainder of 2002 and through 2003. This should begin to support some investment in business furniture during that period. Service-sector employment will stabilize over the course of 2002. Employment growth should accelerate toward the end of the year, however, will remain below the 3% growth rate of the late 90's. New office construction is expected to decline for several more quarters before any signs of recovery materialize. This downturn in new construction will provide the primary drag on furniture demand through mid-2003.