Jim Hackett, the president and chief executive officer of office furniture giant Steelcase Inc., defines the next few months for the industry with one word — murky.
The global economic crunch is biting into nearly every sector Steelcase supplies, making it hard to determine just how long and hard the industry will be hit.
``All of us want clarity,'' Hackett said in a Dec. 22 conference call with industry analysts,'' but this is a cycle that only occurs every 70 years or so. Let's be candid. There is no amount of speculation on our part that is going to determine what is going to happen in the economy.''
The industry only just started climbing back from the hit it took when the dot-com bubble burst in 2000 and 2001. In 2007, the U.S. office furniture industry produced $11.4 billion in products, the first time it had topped $10 billion since 2000 and up 7.4 percent from 2006.
But in 2008, with the end of the housing bubble, sales have started sliding again, according to reports from the Business and Institutional Furniture Manufacturer's Association of Grand Rapids, Mich. Once the final 2008 tally is taken, BIFMA expects production to have dropped by 1.8 percent from 2007. In 2009 it predicts another 11.6 percent drop, down to $9.9 billion.
Grand Rapids-based Steelcase saw sales drop in the third quarter, ended Nov. 28, by 8.4 percent to $811 million, vs. nearly $886 million in the 2007 period.
Its competitor, Herman Miller Inc., saw a 5.8 percent drop for the quarter to $476.6 million.
Both firms have been cutting salaried workforce to try and keep pace with the economic slowdown, but Hackett also noted that Steelcase's increased emphasis in making chairs and furniture for the medical industry could give it a solid base, even if other businesses slow.