February 18, 2002—Following a disappointing 2001 where office furniture industry shipments declined over 17%, the industry looks forward to 2002 being the year in which the demand for office furniture will stop declining and begin to stabilize. The latest forecast prepared by DRI-WEFA, an economic consulting firm, indicates that the outlook for industry shipments will slowly improve during 2002.
The short-term outlook remains very weak due to the deterioration in the labor market since the September 11 terrorist attacks. Service sector employment was particularly hard hit at the end of 2001, declining by 239,000 in the fourth quarter alone and is expected to further drop in the first quarter of 2002. At the same time office vacancy rates have risen sharply. Together, these two elements suggest that demand for office furniture will remain weak early this year.
However, forces are building for an economic recovery that should begin in the second quarter and accelerate through the year. As the economy strengthens the outlook for office furniture orders should begin to steadily improve. Year-over year growth rates for furniture orders and shipments are expected to turn positive by the fourth quarter of 2002. On an annualized basis, shipments are expected to decline by 13% in 2002, and grow by 3.6% during 2003.
BIFMAs membership of more than 250 companies represents over 80% of the value of North American shipments of office furniture. DRI-WEFA formed in May of 2001 by the merger of DRI, a unit of McGraw-Hill, and WEFA, a unit of Thomson Corp. For more information, contact BIFMA.
