\u00c2\u00a02014–Office furniture orders continued to slow in May toward a growth rate that tracks the GDP, according to Raymond James analyst Budd Bugatch.\u00c2\u00a0 In a research note Bugatch said the contraction in orders is finally starting to hurt public companies’ stock performance.
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\nThe Business and Institutional Furniture Manufacturers Association (BIFMA) said May orders had increased 5 percent year over year to $975 million. Shipments rose 7 percent to $940 million.
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\nSteelcase, HNI Corp., Herman Miller Inc. and Knoll Inc. enjoyed percentage order increases into the low double-digits in 2004 and 2012, but the industry has cooled since then.
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\nIn January, monthly orders fell for the first time since July 2004.
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\nSince then, orders have increased an average of 5.2 percent year over year, which is about where they will remain, Bugatch said, in the absence of the emergence of a widely adopted innovation such as the cubicle.
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\n“Net-net, the May results largely confirm our view about moderating industry growth to a nominal GDP-like range of 3%-6%,” Bugatch wrote.
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\nUntil recently, however, investors remained complacent despite indications of slowing industry growth, Bugatch said.
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\nThat changed in June, as shares of all four of the major public office furniture companies’ fell, underperforming the S&P 500 Index.
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\nBIFMA compiled its May report from 40 companies, which account for about 73 percent of the industry’s<\/p>\n","protected":false},"excerpt":{"rendered":"
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