MADA / OFI Trends Survey for July 2015
Furniture Industry Index is Still Strong!
Personal Outlook Hits Record High
Michael A. Dunlap & Associates, LLC unveils the results of its 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 July 2015. This edition marks the 44th Edition, which was started during the summer of 2004.
The survey focuses upon ten key business activities, with respondents rating each area on a scale of TEN (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.
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 July 2015 Overall Survey Index is 58.78 and is the second best since July 2007 (58.49). The highest recorded Index was 59.72 in July 2005; the lowest was 41.45 in April 2009. The average overall index is 54.65.
“The industry continues to move on a very steady and a solidly improving trend line. This is very good news! The Overall Index continues to remain strong and is well above “50”. It is definitely above the 44 Survey average. We re-affirm our prediction that the industry remains on course to achieve its best year in more than a decade.” Mike Dunlap commented.
“We are thrilled with the high Personal Outlook Index!”
The April 2015 survey highlights are:
-Gross Shipments Index of 62.40 and is much higher than the 44 Survey Average of 57.75.
-The Order Backlog Index of 62.50 and is well above the 44 Survey Average of 56.82.
-The Employment Index of 55.42 is well above the 44 Survey Average of 52.17. The Hours Worked Index was 58.33, nearly equal to the 44 Survey Average of 55.44.
-The Capital Expenditures rose to 58.00 compared to 57.88 in April and Tooling Expenditures increased at 58.40 compared to 57.27 in April. These compare to the 44 Survey Averages of 55.44 and 55.79.
-New Product Development slipped slightly to 68.80 compared to 69.70 in April. The previous all-time high of 66.41 was in October 2014 and all are well above the 44 Survey Average of 63.69.
-Raw Material Costs dipped to 48.75 compared to 50.00 in April well above the 44 Survey Average of 44.57. Employee Costs improved to 47.92 compared to 45.94 in April 2015. The 44 Survey Average is 46.74.
-The Personal Outlook Index of 66.40, is the highest recorded since the survey started in 2004 and exceeds the previous high of 66.32 in January 2015. This compares to 64.85 in April 2015 and is well above the 44 Survey averages of 57.68.
Dunlap further stated “The two declines in several index values are not very significant. All have been improving since the first half of 2013, and the large increases during the 1 of 2015 are not a common occurrence. The 1st quarter remained strong and the strength of the 2nd Quarter of 2015 reflects a pattern of solid improvement. The Employment Levels and Hours Worked index values continue to increase and are indicative signs that hiring new employees is not keeping up with demand with overtime.
“New Product Development is extraordinary at 68.80!. Both manufacturers and suppliers continue to report similar experiences. “It’s wonderful to see the continued strength of the index in New Product Development Index.”
“More than 90% of the responses come from companies with less than $50.0 million in sales. 40% are from furniture manufacturers, 35% from suppliers, and 25% from other business ventures.”
The most frequently cited perceived threats to the industry’s success are healthcare costs and the costs of materials. The costs of materials and healthcare are the most commonly cited concerns from respondents since this survey process was started in August 2004.
Dunlap again thanked the respondents with this comment. “Over 70% of the responses came 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 crucial to the performance and improvement to this unique survey.”
“Eight out of ten Index values have improved and only two declined and those that went down were minor adjustments. Only Employee Costs and Material Costs are below the ‘50’ level. We maintain the opinion that the industry will continue to accelerate during the third and fourth quarters of 2015 and will finish strong into 2016.
“All ten of the index values are above the 44 Survey Averages, going back to August 2004! The July index improvements are very significant.”
The July 2015 MADA / OFI Trends survey was sent to more than 800 individuals involved with office furniture 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 $10 Million in sales. The survey repeats in October 2015.
For further information, please contact:
Mike Dunlap at
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 planning, furniture industry trends, Market Entry, Global Partnerships, & Collaboration, Author, Presenter, & Speaker, Mergers, Acquisitions, & License Agreements, Expert Witness Services in Products Liability, and Independent Rep Sales Team Development.
Michael A. Dunlap & Associates, LLC
P.O. Box 2481
Holland, MI 49422-2481