The North American office furniture industry climbed to heady heights with the dot-com business boom in the 1990s, but when the boom went bust, so did sales of desks, chairs, filing cabinets and other storage units.
The industry has been making a steady recovery, however, and this time the growth appears to be far more solid.
``If you look at our history, we went into a hole after 2001,'' said Tom Reardon, executive director of the Business and Institutional Furniture Manufacturers Association in Grand Rapids, Mich. ``It's been a nice, steady climb back up.''
BIFMA predicts U.S. companies will produce $11.8 billion worth of products in 2007, up more than 8 percent from $10.9 billion in 2006. Overall sales are expected to rise as well, to $14.3 billion, compared with $13 billion in 2006.
That is a marked improvement from 2003, when the industry saw $8.5 billion in business, though still not up to the record of $13.2 billion in production in 2000.
While Reardon does not expect the industry to continue at a growth rate of 7-8 percent for long - instead falling to a more sustainable growth of 4 percent - the industry has a different attitude about its sales now than it did 10 years ago.
``It's hard to look back with any candor, but at that time - in the late '90s - everyone thought that this was the new business model, that it would just keep going, and a lot of companies invested in capital improvements expecting [business] would continue to grow,'' he said.
Now firms are being much more cautious and looking at ways to squeeze additional efficiency out of machines and facilities, rather than sinking money into expansions, he said.
The growth has been good news for molders and other suppliers to the industry, especially because so many of them in Michigan - the traditional heart of the industry - supply both office furniture makers and the struggling auto industry, Reardon said.
Those suppliers also are facing increased competition from producers in lower-cost countries now than they did 10 years ago, though.
In 1997, U.S. companies imported about $1.2 billion worth of office furniture. In 2007, the trade group predicts imports will be double that level.
So far the bulk of interest in imported components has been for wood and other labor-intensive parts, Reardon said, but the presence of new competition is adding stress for suppliers.
``The whole global industry has been offshoring for suppliers,'' he said. ``The high degree of customization in high-end office furniture like chairs has helped to provide some insulation, but there is more of it now.''
