Modest Office Furniture Industry Recovery Expected in late-2003

Furniture World Magazine

Grand Rapids, MI - The Business and Institutional Furniture Manufacturer's Association (BIFMA) International recently released the latest office furniture industry forecast prepared by the economic consulting organization, Global Insight (formerly DRI-WEFA). The forecast anticipates a 5.6% increase in shipments to $9.4 billion for 2003, as compared to $8.9 billion realized in 2002. Further improvement is expected in 2004 with shipments expected to top $10.5 billion. The latest forecast assumes a short but successful first-quarter altercation with Iraq will put a drag on first quarter economic activity. Once success is realized, economic confidence returns and a recover begins in earnest. A cautious corporate investment outlook and weak office construction will restrain office furniture shipments, while rebounding employment and corporate profits will stabilize demand and contribute to shipment growth in the second half of 2003. After tax corporate profit growth is expected to accelerate in 2003, but not at the pace or to the level expected just 3 months ago. Stronger business sentiment and an improved business investment climate should contribute to more vigorous profit recovery in 2004. Likewise, service-sector employment has recovered somewhat, and growth is expected to continue through 2004. However, employment growth will not reach the rate that characterized the late-90's, limiting its upside contribution to office furniture demand during the next few years. Established in 1973, BIFMA International is a not-for-profit trade association of furniture manufacturers and suppliers addressing issues of common concern.