As it has for much of the past three decades, the office furniture market should continue its uphill climb this year.
But that mountain could look a lot like Everest to some suppliers attempting to enter the industry.
``It's extremely competitive and dominated by a few large companies,'' said equity analyst David Manthey of Robert W. Baird & Co. in Milwaukee. ``Small companies out there are having a hard enough time competing, and it doesn't make a lot of sense for new [companies] to enter the market.
``Going head-to-head with the big guys is suicide.''
That same situation faces processors. If a company does not have a contract with one of a handful of larger players — including Steelcase Inc., Haworth Inc., Herman Miller Inc., Knoll Inc. and Hon Industries Inc. — chances of success are slim, Manthey said.
Still, the market continues to swell, according to figures from the Business & Institutional Furniture Manufacturers Association in Grand Rapids, Mich.
Office furniture shipments were expected to rise 7.5-8 percent in 1998, said BIFMA Executive Director Thomas Reardon.
Although final tallies were not available, the total value of those shipments was expected to reach $12.3 billion in 1998, compared to $11.4 billion in 1997, according to BIFMA estimates.
And Reardon said he had no reason to think that 1999 would be much different.
``We've benefited from the overall health of the economy,'' Reardon said. ``When corporations are hiring more people, they need more furniture. It should be another good year, with single-digit growth again, in 1999.''
Signs of a slight slowdown are evident, however. In 1997, the industry had one of its banner years, with shipments up 14 percent from the year before. In 1998, a more turbulent economy caused fewer firms to experience the same growth, Reardon said.
``You look around the world economy now and see more disparity,'' he said. ``Companies that have invested in areas such as Asia are going to be hurt. That could cause a slight downturn in business.''
The same disparity has affected office furniture makers. Companies such as Steelcase, the industry sales leader, have announced layoffs, while others have thrived.
Still, for most of the past three decades, the industry has held steady, Manthey said. Few dramatic shifts in either direction have jolted the industry overnight, he said.
Some newer trends have emerged, however. Several furniture makers, including Steelcase, are adopting a one-stop-shopping approach, Reardon said. Instead of merely selling products, the firms will help design spaces along with architects and suggest the right furniture systems.
And while such trends as communal work areas and flexible work spaces have been written about for years in trade journals, those trends are just beginning to roll out in North America, Reardon said.
Home offices and alternative office spaces continue to offer new wrinkles on an old landscape, Manthey added. Yet, at the end of the day, the bulk of the office furniture market still is involved in office systems, or setting up entire work environments for a cadre of employees.
But some new computer-age blips dot the placid scene. Haworth recently announced a fully functioning portable office that closes, locks and can be wheeled away with work in progress.
Meanwhile, Herman Miller has countered with the Acrobat Suite, a cubicle that enables people to work in any position they want — sitting, standing or lying down.
Still, the industry is fairly resilient and fairly consistent, at least for its financial bottom line, Manthey said.
