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Business Review Western MI
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BIFMA outlook: Flat sales in '08
(2007-11-28)
(wgvu) - BIFMA outlook: Flat sales in '08


Nov. 29, 2007

By Mark Sanchez
marks@mbusinessreview.com

The latest quarterly outlook sees essentially flat sales next year for
the office furniture industry, as long the nation's economy stays out
of recession.

The forecast from the Grand Rapids-based Business and Institutional
Furniture Man u facturers Association projects industrywide shipments to
decline 0.6 percent, to $11.3 billion.

Things are slowing down and we expect a little flat spot next
year, BIFMA Executive Director Tom Reardon said.

The decline reflects the trend of BIFMA's quarterly forecasts, which
have been adjusted downward during 2007.

Flat or slightly lower sales in 2008 would follow a projected rate of
5.2 percent shipment growth in 2007, to $11.4 billion.

That also would end four consecutive years of growth for the industry,
which continues to rebuild after a deep downturn from 2001 to 2003.

The updated outlook, prepared quarterly by Global Insight, primarily
reflects expectations for slower U.S. economic growth next year,
downward revisions in forecasts for new office construction and slower
corporate profit growth, Reardon said.
The outlook is based on a presumption that the national economy will
not slip into recession.

It's a reasonable expectation, Reardon said. Things have
been slowing down.

Federal Reserve Bank governors expect the nation's gross domestic
product to grow between 1.8 percent and 2.5 percent in 2008, down from
an expected 2.5 to 2.75 percent forecast three moths earlier.

The GDP in the third quarter grew at a brisk 3.9 percent rate and
registered 3.8 percent in the second quarter, according to the U.S.
Department of Commerce.

Through the third quarter, office furniture industry shipments were up
5.9 percent over the same period in 2006, to $8.44 billion.

Global Insight sees the industry dipping into negative territory for
three or four quarters, then rebounding toward the end of 2008 and
through early to mid-2009. Reardon said.
It appears to be a relatively short duration of no growth, he
said.


Here's a look at BIFMA's updated quarterly outlook at industry,
plus results going back to 2000:

Year Shipments Change from previous year
2008: $11.3 billion -0.6%*
2007: $11.4 billion +5.2%*
2006: $10.82 billion +7.4%
2005: $10.07 billion +12.7%
2004: $8.93 billion +5.1%
2003: $8.50 billion -4.3
2002: $8.89 billion -19%
2001: $10.97 billion -17.4%
2000: $13.28 billion +8.5%
* Projections

Here are industry shipments through the third quarter of 2007, compared
to 2006:

Quarter 2006 2007
1Q $2.52 billion $2.66 billion +5.3%
2Q $2.70 billion $2.83 billion +4.6%
3Q $2.74 billion $2.95 billion +7.8%
4Q $2.85 billion N/A

Source: Business and Institutional Furniture Manufacturers Association
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