Furniture, Office
SIC 2520
NAICS 3372
This industry classification covers manufacturers of office furniture, including desks, conference tables, chairs, credenzas, bookcases, portable partitions, and other equipment used in both traditional office settings and the emerging home office environment.
Highly dependent upon a broad range of socioeconomic factors and general business practices, the global office furniture industry remained healthy in 2005. The industry was concentrated in the United States, which produces the majority of office furniture and also imports billions of dollars in office furniture every year. Changing dynamics in the workplace, as companies in all fields of business activity rearrange their organizational and operational structures, have resulted in new challenges in the industry. For example, many large corporations were forced to downsize in the sliding economy of 2000 and 2001, reducing demand for new furniture. However, small and mid-sized companies fared better and continued to buy office furniture. To keep costs down, though, more companies opted to purchase ready-to-assemble (RTA) or refurbished furniture. Although measuring the volume of refurbished furniture is difficult, the Business and Institutional Furniture Manufacturer's Association (BIFMA) cited estimates at 8 to 10 percent of new furniture sales. Increased sales of low-cost and RTA furniture affect distribution channels, as this type of furniture is sold through office superstores, discount stores, and warehouse clubs rather than through specialty office furniture stores.
Another key factor affecting the office furniture market is the price of steel, the primary raw material used in production of desks, office tables, cabinets, and chairs. After beginning to recover from a shaky market between 2000 and 2003, U.S. office furniture companies were faced with a sudden spike in steel prices in early 2004 that threatened newly reestablished profit margins. At the same time, increasing competition from lower-cost suppliers in developing countries was beginning to play a larger role in the market—a trend that analysts expected would continue through the first decade of the twenty-first century.
As the corporate world followed a trend toward cutting costs in the 1990s and early 2000s, offices were reorganized to adapt to the smaller spaces in which workers operate. Most notably, exclusive-and often divided-offices gave way to more communal cubicles. Furthermore, many companies altered their internal business dynamics. Rather than the hierarchical, individual-based productivity methods and office configurations that were the rule since the massive proliferation of white-collar jobs earlier in the twentieth century, companies fostered team-based, highly communicative business structures. As a result, the emphasis in the office furniture industry shift from elaborate and opulent design methods to efficient, "egalitarian" furniture that more readily reflects the need for active and frequent intercommunication in the workplace.
The massive proliferation and rapid development of office technology also had a dramatic effect on the office furniture industry. Companies within the industry had to adjust their design and manufacturing processes to efficiently accommodate new technology, while remaining abreast of rapidly emerging office technology. Overall, this shift resulted in an industry-wide focus on office furniture that is flexible and adjustable, so businesses can avoid having to purchase new furniture as technology is developed with different components and configurations. Furniture that...
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