Office Furniture, Except Wood

SIC 2522

Companies in this industry

Industry report:

This category describes establishments primarily engaged in the manufacturing of office furniture, except furniture chiefly made of wood. Establishments primarily engaged in manufacturing safes and vaults are classified in SIC 3499: Fabricated Metal Products, Not Elsewhere Classified. The products manufactured by the industry include office benches, bookcases, chairs, cabinets, desks, filing cabinets, modular furniture systems, panel furniture systems, office partitions, stools, tables, and wall cases.

Industry Snapshot

The office furniture industry is tied to national employment, corporate growth, and the office construction industry: as the economy grows, so does the expansion and profit of office furniture manufacturing. As the AKTRIN Research Institute stated in a 2003 industry report, "corporate profitability is one of the most forthright determinations for business office furniture acquisition." Such facts made for a sluggish business in the late 2000s, as the U.S. economy slowed.

The Business and Institutional Furniture Manufacturer's Association (BIFMA) estimated that product values for the office furniture industry as a whole totaled approximately $11.1 billion in 2008. Imports in the category held fairly steady at $2.5 billion, and exports increased to $679 million, up from $565 million in 2007 and a decade low of $307 million in 2003. Canada remained the top market for office furniture, accounting for about 50 percent of U.S. exports in 2008. Domestic consumption of office furniture, however, declined 3.2 percent in 2008 to $12.9 billion, due in part to the slow economy. Nonwood products consistently comprised about three-quarters of total office furniture sales in the mid- to late 2000s.

Organization and Structure

West Michigan, especially in and around Grand Rapids and Holland, was home to the three leading office furniture manufacturers: Steelcase Inc., Haworth Inc., and Herman Miller Inc. Product lines at Haworth and Herman Miller tended to focus on wood office furniture, although the companies produced nonwood pieces as well. Several smaller companies are also based in West Michigan, and the area boasts facilities that produce about 65 percent of all office furniture manufactured in North America.

When wood was still the material of choice for most manufacturers, stationery stores and office equipment dealers handled sales of office furniture. The concept of "office design" was unknown. Companies purchased desks and other pieces as needed, setting them up in rows in big, open spaces, creating an office environment that very much resembled a classroom.

Later, as the demand for office furniture, including new nonwood products, increased and the market became more specialized and sophisticated, major manufacturers employed their own sales staffs and dealer networks to handle large-scale orders. In addition, the introduction of products such as computer desks and "systems furniture," which consisted of panels and other pieces that could be easily moved and reconfigured to accommodate changing needs, generated a need for office designers. The bigger firms began to offer design assistance to customers who were eager to get the most out of their furniture purchases. Smaller companies that were unable to support their own sales and design staffs turned instead to manufacturers' representatives to provide the same services to customers.

While a few manufacturers continued to sell directly to customers, most relied on other means of distribution. For example, contract office furniture dealers, who specialize in large-scale orders placed with industry giants such as Steelcase, handled nearly two-thirds of all office furniture sales, according to a joint survey conducted by BIFMA and the Business Products Industry Association (BPIA). The remaining sales were divided evenly among six other categories: budget to mid-market furniture dealers; office product dealers; superstores, warehouse clubs, and other mass merchandisers; wholesalers; government; and mail order, direct sales, and other channels. Superstores, warehouse clubs, and other mass merchandisers continued to show strong growth.

Background and Development

Wood dominated the office furniture market until the 1930s. Metal filing cabinets and desks eventually emerged as popular, less expensive substitutes for wooden models. The military's need for steel briefly interrupted this trend during World War II, but in the postwar years the metal office furniture industry launched an aggressive marketing campaign touting the advantages of its products, emphasizing durability and safety (offices filled with wood furniture posed a fire hazard). The rivalry between the two camps gradually eased, however, as wood office furniture manufacturers began to incorporate steel parts in their designs, and metal office furniture manufacturers began to feature wooden tops.

In the 1950s, U.S. offices and office furniture were generally drab, stark, and purely functional. Beginning in the late 1960s and early 1970s, however, office design, layout, and furniture began to be influenced by modern ideas of worker productivity and the realization that a link existed between employee performance and the quality of the office environment.

From the late 1970s through the early 1980s, office furniture sales increased an average of 19 percent annually, according to BIFMA. The boom was fueled by the rapid growth of the white-collar workforce, especially in the computer industry and other information-related fields. These sales were largely driven by the demand for "systems furniture," or mix-and-match cabinets, desks, and wall panels or partitions. Changing work habits created a need for such products. For example, the rise of computers and related hardware helped spawn new types of workstations, printer tables, and movable walls and partitions that made it easy to reconfigure office space. Prewired partitions, which first appeared in the mid-1970s, facilitated wiring and networking of computers.

Beginning in the late 1980s, however, the entire office furniture industry felt the impact of white-collar downsizing at many firms. A recession in 1991-92 also hit furniture manufacturers extremely hard. From 1986 until 1992, average annual sales growth was just under 3 percent. Shipments for the metal office furniture manufacturing industry fell from $6.2 billion in 1989 to $5.6 billion in 1991. Exports, which had doubled between 1988 and 1989 from $86.7 million to $170.8 million, fell during this period as well.

The recession led to even more layoffs among office workers as one company after another downsized. Office space, which had mushroomed during the boom years of the 1980s when demand was high, sat vacant. As a result, few new offices were built during the late 1980s and early 1990s, which meant less demand for new office furniture. Corporations desperately searching for ways to save money began to regard new office furniture as a luxury item rather than a necessity. The weak economy eventually forced some office furniture manufacturing companies out of business, especially those that specialized in high-end products. To remain competitive, surviving manufacturers were forced to reduce their own staffs and increase productivity.

The economic picture began to brighten in 1993, when office furniture sales hit $8.1 billion, a 5.1 percent increase over the previous year's sales figure of $7.7 billion. The improved fortunes of office furniture manufacturers in the mid-1990s reflected an overall upswing in the economy, including a surge in nonresidential building starts and falling unemployment rates. However, no one envisioned a return to the boom years of the early 1980s.

Ready-to-assemble (RTA) furniture captured the attention of some industry leaders. Haworth purchased Globe Business Furniture, an RTA supplier specializing in partially assembled chairs. Globe's sales grew an average of 25 percent between 1981 and 1992, making it an attractive acquisition for a company such as Haworth that was intent on broadening its product line to include lower-priced furniture. Industry experts expected the trend to continue, but they warned producers against moving to RTA as a quick-fix method for regaining market share, in part because RTA required an entirely different cost structure than that used by traditional office furniture manufacturers.

In the mid-1990s office furniture manufacturers became increasingly apprehensive about the effect of ongoing environmental legislation on their bottom lines. In their factories, they already incurred increased costs for disposing of hazardous wastes generated by the furniture-finishing process. In the marketplace, they faced mounting concerns about the effect of various pollutants on indoor air quality. Among the most common offenders were formaldehyde (from pressed-wood products), adhesives, and paints and other finishes. To address these problems, some U.S. office furniture manufacturers switched to different kinds of finishes and alternative glues, although some of these substitutes performed poorly.

Another change that took place during the 1990s focused on distribution. Many of the industry leaders, including Steelcase, Haworth, and Herman Miller, switched to dedicated dealers. Others, including HNI Corp. (previously HON Industries), moved in the opposite direction and distributed their products through office supply superstores and other discount outlets.

One lucrative market niche that first took hold in the late 1990s was ergonomically designed office furniture that offered maximum comfort and flexibility. As people became more aware of computer-related, white-collar occupational hazards such as repetitive strain injury, carpal tunnel syndrome, backache, and other ailments, they demanded furniture that would prevent or lessen the severity of these injuries. Office furniture manufacturers were at the forefront of the drive to design and produce ergonomic office furniture that their customers hoped would increase productivity, curb health care costs, and reduce the threat of lawsuits from employees with work-related disabilities.

Sales of high-end products, such as workstations that adjusted to let users sit or stand while they worked and computer monitors and keyboards that could be positioned at various levels, helped propel growth in the industry. Demand for less-expensive ergonomic furniture also was strong. Small companies concerned about liability for their employees' work-related injuries were often unable to afford traditional high-priced ergonomic furniture. Companies responded to this dilemma by coming out with new mid- and lower-priced lines that offered some adjustability.

Among the more pressing issues faced by the office furniture manufacturing industry in the late 1990s was the growth of Federal Prison Industries (FPI), a program that employed prisoners to make various kinds of products, including office furniture. By law, whenever the federal government was in the market for office furniture, it had to give preference to FPI and its prison-made products, regardless of cost. As a result, U.S. manufacturers lost tens of millions of dollars in sales every year. With BIFMA, office furniture manufacturers joined together to fight for legislation to end the competitive advantage enjoyed by FPI over private companies.

Other challenges for office furniture manufactures included dealing with continued corporate downsizing and developing more products for home use in a market that was increasingly dominated by ready-to-assemble furniture companies such as O'Sullivan Industries, Sauder Woodworking, and Bush Industries. On the labor front, they also were concerned about the need to work more efficiently to cut manufacturing costs.

At the beginning of the twenty-first century, falling interest rates helped offset a declining economy, and low inflation contributed to a sustained period of sales gains between 2 and 5 percent. Yet the industry continued to suffer from too many suppliers competing for increasingly few customers. In fact, manufacturers were routinely forced to discount their prices by as much as 50 percent or more on high-volume purchases in order to win lucrative contracts.

Falling prices proved a minor challenge compared to the larger economic picture of the early 2000s. The dot-com technology boom of the late 1990s went bust at the turn of the century, drying up the once dependable customer base of the industry. Fewer start-up companies were launched, and existing corporations, wary of the overall health of the economy, were reluctant to expand. The market for new office furniture plummeted 17.4 percent between 2000 and 2001, and dropped another 19 percent in 2002. The three largest office furniture makers closed 16 plants and laid off 13,000 workers. In 2004 the industry was revived, posting positive growth for the first time in three years and reporting production of $8.9 billion, a volume that corresponded to 1994 levels. In 2006 the nonwood segment of office furniture posted revenues of $9.45 billion, which was the lion's share of total shipments of $10.8 billion.

Current Conditions

According to Dun and Bradstreet's (D&B) 2009 Industry Reports, 682 establishments operated in the manufacture of wood office furniture in the United States in the late 2000s. Michigan accounted for 35 percent of the 28,654 people employed by the industry. Other top-employing states in this category were California, Texas, Wisconsin, and Tennessee. Total annual sales for the industry reached $10.4 billion in 2008, according to D&B. Michigan was the number-one state in terms of revenues as well, with almost $6.6 billion in sales, or about 64 percent of the nation's total. Iowa was second with $2.4 billion. Rounding out the top five in terms of sales were Indiana ($128.9 million), Pennsylvania ($111.5 million), and Texas ($103 million).

Figures from the BIFMA showed that of the office furniture sold, both wood and nonwood, in 2008, seating and chairs accounted for 28.4 percent; office systems for 28.1 percent; files for 11.6 percent; tables for 8.3 percent; casegoods for 11.3 percent; files for 11.6 percent; storage for 7.8 percent; and other products for 4.5 percent. The BIFMA predicted production in the U.S. office furniture industry would continue to decline through the end of the twenty-first century's first decade, partly due to increasing competition from overseas imports. Traditionally, Canada imported and exported about half of the U.S. trade totals in the office furniture category, but by 2008 it had lost the number-one spot to China, which accounted for about 40 percent of office furniture imports (as compared to less than 13 percent in 2000). In the mid-2000s, the United States imported about $1.0 billion in Chinese-made office furniture.

An aging U.S. population created demand for health care and, in turn, furnishings for medical facilities. By 2030, when nearly 20 percent of the U.S. population will be age 65 years or older, the health care industry was projected to require an additional 417,000 patient rooms in hospitals. Steelworth, Haworth, and Herman Miller were among the office furniture manufacturers that expanded into this $1 billion health care market.

Future growth may also be found in the higher education market, where colleges and universities are competing for students by increasing the appeal of classrooms, dormitories, and other furnished environments. International shipments, particularly to Asia, are another potential market for U.S. furniture manufacturers.

Industry Leaders

The world's largest office furniture manufacturer in the late 2000s was Steelcase Inc. Based in Grand Rapids, Michigan, Steelcase posted sales of $3.2 billion in 2009. It employed some 13,000 workers, operated more than 30 manufacturing plants, and distributed through approximately 550 dealer locations worldwide. Although the company specialized in nonwood office furniture, Steelcase also manufactured wood office furniture, panels and partitions, lighting systems, and customized millwork.

Steelcase's chief rivals in the high-end office furniture industry were Haworth Inc. and Herman Miller Inc. Haworth, in Holland, Michigan, was a privately held company that posted $1.6 billion in sales and employed 8,00 people in 2007. Herman Miller of Zeeland, Michigan, reported $1.6 billion in sales for 2009 and employed more than 5,000. Other leaders in the metal office furniture market included HNI Corp. with 2008 sales of $2.4 billion and 12,200 employees; Knoll Inc. of East Greenville, Pennsylvania, with $1.1 billion in sales and 3,838 employees in 2009; and KI (formerly Krueger International) of Green Bay, Wisconsin, with $665.7 million in 2008 sales and 2,800 employees.


Since 1988 employment in all sectors of the office furniture manufacturing industry has steadily declined. When a recession struck in the early 1990s, it forced the industry's corporate customers to rethink their priorities and postpone furniture purchases that could be considered luxuries rather than necessities. Office furniture manufacturers responded by targeting their own payrolls for cutbacks. Increased automation and efficiency contributed to a reduction in the workforce, especially in production, adding to the likelihood that those lost jobs would never be replaced.

According to the Bureau of Labor Statistics (BLS), the number of people employed by the office furniture manufacturing industry dropped from 157,500 in 1996 to 132,400 in 2006. In 2008 approximately 132,660 people were employed in all areas of office furniture manufacturing, earning an average $38,630 annual salary. The BLS predicted employment would be down to 123,400 by 2016.

America and the World

According to BIFMA, U.S. office furniture imports totaled $2.5 billion in 2008, and exports totaled $679 million. Canada ranked as one of the country's main trading partners. In 2005 it received about $270 million in U.S. office furniture exports and provided $1.0 billion of all office furniture brought into the United States. In the late 2000s China displaced Canada from its first-place position, accounting for about 40 percent of U.S. imports in office furniture. Other countries that imported significant amounts of U.S.-made furniture were Mexico, the United Kingdom, the Caymen Islands, and Japan.

Research and Technology

In response to management trends stressing teamwork, ongoing corporate downsizing, concerns about occupational-related injuries, and the increasing number of people working out of their homes, office furniture manufacturers devoted many of their research dollars to the development of multifunctional, ergonomically designed products. In larger offices, for example, cubicle clusters and movable panels were being replaced by a more open, less isolated environment that encouraged people to work together and made it physically easier for them to do so. Also growing in popularity were adjustable work surfaces and components that could serve more than one use, to accommodate workers whose jobs were no longer quite so narrowly defined. Designing all of these products to work better with rapidly changing computer technology also was a top priority.

Ergonomics was also at the forefront as employers and manufacturers sought ways to comply with federal mandates (some resulting from the 1990 Americans with Disabilities Act) and ward off lawsuits filed by workers suffering from job-related aches and pains. It was felt that ergonomically designed furniture could increase worker productivity by 15 percent. The emphasis was on adjustability, such as motorized tables with multiple height settings to accommodate a person who was standing or sitting, and chairs that came in several sizes to fit a wide range of body types.

The need that many people had for a comfortable and functional home office also led to creative new products from the design centers of U.S. manufacturers. Flexibility and good looks were especially important to this market, given that home office space might be very limited and any pieces had to blend well with home furnishings. Therefore, manufacturers put work centers and other components on wheels for portability, invented desks that folded out or swung open for working and then closed to hide office equipment, and created adjustable tables that could do double-duty as coffee tables or typing tables.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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