U.S. office furniture market forecast to grow by 12% in 2015
The U.S. Business and Institutional Furniture Manufacturers Association, BIFMA, expects the U.S. market for office furniture to grow by 4.2% in 2014 and by a double digit 12.1% in 2015.
The market is estimated to be USD 12.0 billion this year, growing to USD 13.5 billion next year.
Production is projected to grow by 2.8% in 2014 and 10.4% in 2015, according to the latest BIFMA outlook.
The latest quarterly outlook offered a projection for 2015 shipment volume for the first time. The outlook typically changes each quarter based on new sales and economic data that come in throughout the year.
While the organization expects slow growth for 2014, if the outlook holds true, it would still represent a slight pick up in business from the last two years.
In 2013, industry shipments in North America grew just 0.9% to USD 9.35 billion, which is a little better than in 2012, when business dipped 1.1% to USD 9.27 billion, according to BIFMA. The industry ended 2013 with a 1% decline in shipments for the fourth quarter, to USD 2.38 billion.
Given the present economy, the outlook for 2014 “seems reasonable at this point,” BIFMA Executive Director Tom Reardon said.
The period of slow growth comes despite corporate profits holding at record levels and while office construction picks up, Steelcase CFO Dave Sylvester noted during a recent investor conference.
Sylvester sounded an optimistic note for the future during a presentation at the Raymond James Investor Conference in Orlando, Florida. He told investors the office furniture industry’s fortunes will be driven by the changing dynamics of the modern workplace that place greater emphasis on teamwork and collaboration, mobile technology that allows people to work from virtually anywhere, and a need for corporate employers to optimize real estate.
While some corporate clients have been releasing spending to update their workspace, many still have not, Sylvester said. Much of corporate America still has office space built around the cubicles of the 1980s, he said.
The changes occurring in today’s office culture is “the bigger deal” for the industry than economic factors, he said.
“So very few companies have invested in modernizing their spaces when these changes or forces that are affecting work are reaching exponential consequences,” Sylvester said. “Work is changing at a dramatic pace and companies have not invested in their space dramatically in the last 15 years.
“There’s pent-up demand to modernize space.”