Industry Index Improves In Latest Survey
Michael A. Dunlap & Associates, LLC announces the results of the 21st edition of its quarterly MADA/OFI Trends Survey, a tool that designed to measure the current business activity of the office furniture industry and its suppliers. This survey was completed during the month of July 2009.
The survey focuses upon 10 key business activities, with respondents rating each area on a scale of 10 (the highest) to ONE (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.
An Industry Index Number quantifies where the industry is currently performing. For example, an index of 100 means that things “couldn’t be better,” an index of ONE is “absolutely the worst” it can be, and an index of 50 means it is neutral; no change “up” or “down.”
The July 2009 Overall Survey Index is 48.30. The January 2009 and April 2009 Overall Survey Index values were 46.17 and 41.45, respectively. The highest recorded Index was 59.72 in July 2005. The average is 54.34 since the survey started in August 2004.
Gross Shipments, Order Backlog, Employment Levels, Hours Worked, Capital Expenditures, Tooling Expenditures, and Personal Outlook all improved significantly compared to April 2009, but remained below 50.00.
Dunlap commented, “I am pleased to see the improvements, but they still indicate that the industry is still in the doldrums. I expect to see more improvements during the 3rd and 4th quarters of 2009.”
Personal Outlook Index improved to 45.85 after falling to 37.04 in January and 41.38 in April 2009. “It’s been below 50.00 since January 2008, so even though it is low, there is some improvement during the past three months,” Dunlap commented. “More than 34% reported they are optimistic about the future. It was only 25% in April.”
The majority of respondents continue to cite the economic conditions, healthcare costs, and energy
costs as the “largest threats to the industry.”
Dunlap stated, “[This year] has been an exceptionally difficult [one] for this industry, but I see brighter days ahead. There are enough indicators that tell us that the current industry recession has probably bottomed out. The modest increases in shipments and orders during the second quarter suggest this.”
The July 2009 MADA/OFI Trends survey was sent to more than 630 individuals involved with office furniture manufacturing and suppliers from Asia, 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 October 2009.