The 50th Quarterly MADA / OFI Trends Survey

May 14th, 2017 / Holland, MI

April Furniture Industry Index Is Mixed, but Solid!

Firm Celebrates its 50th Quarterly Survey

Michael A. Dunlap & Associates, LLC unveils the results of its April 2017 Quarterly MADA / OFI Trends Survey, a unique tool that measures the current business activity of the commercial furniture industry and its suppliers. This survey was completed during the month of April 2017 and marks the 50th Edition. The Survey was started during the summer of 2004.

The survey focuses on ten key business activities and respondents rate each area on a scale of TEN (the highest) to ONE (the lowest). These include 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.

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 ONE is “absolutely the worst” it can be, and an index of 50 means it is neutral; no change “up” or “down”.

The April Overall Survey Index is (55.41) compared to the 50 Survey average for the overall index of 54.89. The highest recorded Index was 59.72 in July 2005 and the lowest was 41.45 in April 2009 during the bottom of the recession.

“The industry continues to grow but at a much slower pace. The Overall Index is strong and remains above the 54.79 Survey average. 2016 was the best year the industry has seen in well over a decade. We remain confident that 2017 will exceed 2016.” Mike Dunlap commented.

The April 2017 survey highlights are:

  • Gross Shipments Index is 50.13 after an all-time high of 64.85 in October 2014 and an all-time low of 41.40 in July 2009. The 50 Survey Average is 57.89. The Order Backlog Index is 61.00. The 50 Survey Average is 57.89. The relatively low Gross Sales Index is offset by the higher Backlog index, s many projects during the 1st Quarter have been pushed out into the 2nd or 3rf Quarters.
  • The Employment Index is 53.04. The 50 Survey Average is 52.45. The Hours Worked Index is 51.82. The 50 Survey Average is 55.65. Both the Employment Index and The Hours Worked Index have been running in the mid-to-upper 50’s since October 2014. With the additional hiring during this period, the hours worked has declined reflecting a reduction in overtime.
  • The Capital Expenditures is 64.50. Tooling Expenditures is 66.00. These compare to the 50 Survey Averages of 55.89 and 55.21. Although somewhat higher than previous years, these Index values tend to be cyclical from 4th to 1st Quarters due to new products being prepared for NeoCon.
  • New Product Development is 63.91. The 50 Survey Average is 63.45. After some weaker Quarters, this has bounced back and we are happy to see it!
  • Raw Material Costs 43.48. The 50 Survey Average is 45.01. When economies grow and gain strength, raw materials prices go up. It is a simple economic reality.
  • Employee Costs is 43.33. The 50 Survey Average is 46.58. Much like material costs, as an economy approaches full employment, wages, benefits, and other costs increase.
  • The Personal Outlook Index is 63.91. The 50 Survey average is 58.33. The Personal Outlook Index has remained above the Average since January 2014. The Median Value is 61.06, which reinforces the strength of this indicator.

Dunlap stated, “Although some think this slowdown is an indicates a general decline in the industry performance, at MADA, we disagree. Where there are declines, they are offset by a companion Index, I am still pleased to see the strength of the Personal Outlook Index. It’s a purely emotional question but we put a lot of value on this content.”

The most frequently cited perceived threats to the industry’s success are material costs, healthcare costs, and energy costs. Healthcare costs are the most commonly cited concern from respondents since this survey process was started in August 2004.

As always, Dunlap thanked the respondents with this comment. “Almost 75% of the responses come from executives who are the Chairman, CEO, COO or President of their organizations. I am always extremely grateful for their participation and support. Their suggestions and recommendations are extremely helpful to the performance and content of this unique survey.”

“Three out of ten Index values have improved and seven have declined, but these are simple corrections in the industry’s performance. Only Material costs and Employee costs are below the ‘50’ level. We maintain the opinion that the industry will continue to grow steadily during mid 2017 and probably into 2018.”

The April 2017 MADA / OFI Trends survey was sent to more than 500 individuals involved with the commercial furniture industry’s 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 $1.0 Million in sales. The survey repeats in July 2017.

For further information, please contact:

Mike Dunlap at
Phone: 616-786-3524
Mobile: 616-990-8725
e-mail: mike@mdunlap-associates.com

www.mdunlap-associates.com

Michael A. Dunlap & Associates, LLC, is a consulting firm that focuses upon issues involving the working, learning, healing, and hospitality environments and furniture industries.

These include Strategic Business and Market Entry & Planning, Commercial Furniture Industry Trends, Global Partnerships, & Collaboration, Author, Presenter, & Speaker, Mergers, Acquisitions, & License Agreements, Expert Witness Services in Products Liability, and Independent Rep Sales Team Development.

 

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