Public Building and Related Furniture

SIC 2531

Companies in this industry

Industry report:

This category primarily encompasses establishments engaged in manufacturing furniture for public use in schools, theaters, assembly halls, churches, and libraries. Examples include bleacher and stadium seating, church pews, library chairs and tables, and blackboards. The public building and related furniture category also includes seating for public conveyances such as automobiles, aircraft, and passenger trains. This category does not include manufacturers of stone furniture, which are classified under SIC 3281: Cut Stone and Stone Products, nor does it include those that manufacture concrete furniture, which can be found under SIC 3272: Concrete Products, Except Block and Brick.

Industry Snapshot

The companies that comprise the category of public building and related furniture in the United States differ greatly in structure, marketing strategy, and fiscal health, due to the diversified nature of the classification. Nearly half are smaller firms with fewer than 100 employees on the payroll, while roughly 10 percent are corporate subsidiaries. The majority of companies in the industry are "single establishment companies" that are not part of a larger parent corporation.

The variety of products manufactured by the public building and related furniture industry defies a general description of industry outlook. A smaller and less profitable segment of the industry involved the manufacture of church furniture, while providers of automobile seats to car manufacturers are typically more visible and fiscally sound. Early in the twentieth century, much of the public seating furniture was made of wood. However, the incorporation of new technologies such as plastic radically altered manufacturing processes in this category. Many companies were compelled to remarket their products to meet changing demands and a tougher economic situation. Increasingly stringent government regulations in regard to consumer safety and access for the disabled also force periodic changes in the industry.

Organization and Structure

Most companies in the public building and related furniture industry were comprised of divisions responsible for different steps of the manufacturing process, including research and development, executive decision making, manufacturing, marketing strategy, and customer support. Many of the products manufactured in the industry were marketed to other companies or institutions, rather than the public. Automobile seats, for example, were sold to firms specializing in seat frames and exteriors, which in turn sold the completed seating units to automobile manufacturers. Manufacturers commonly advertised in trade journals, such as Automotive News, Library Journal, and other publications aimed at executives, buyers, and other upper-level personnel.

During the economic recession of the early 1990s, many public building and related furniture manufacturers focused on customer satisfaction and product reliability as part of their plan to survive in the industry. The particular challenge was that many public building and related furniture manufacturers marketed their products to other companies, rather than the ultimate consumer, making it difficult to gauge product satisfaction.

Background and Development

Many of the firms engaged in manufacturing public building and related furniture date to the late nineteenth century. During this period, the Industrial Revolution and the urbanization of the United States played a key role in the development and growth of the industry, as a variety of new demands for public-use furniture developed. For example, when educational reform in the United States led to the replacement of the one-room schoolhouse with large school buildings in consolidated districts, the subsequent demand for school desks and blackboards was filled by newly formed firms in the industry. Furthermore, newly prosperous industrial magnates founded and endowed hundreds of colleges and universities, causing the growth of firms that could manufacture and ship seats and desks all over the country. U.S. Steel founder Andrew Carnegie funded the construction of more than 2,800 public libraries across the country, and a new niche in the market arose to meet the demand for librarians' desks, as well as patron tables and chairs.

The Industrial Revolution also was responsible for major shifts in population from rural regions to larger urban centers and, later, to suburban communities. The shift in demographics was compounded by waves of immigrants from Europe, fueling the construction of new and larger churches to serve the needs of evolving communities. A demand for more interior furniture, such as church pews, accompanied the exponential growth of churches.

The increased popularity of leisure and entertainment activities in the United States also played a key role in the genesis of the public building and related furniture industry. The development of organized community and collegiate sports, such as baseball and football, necessitated the construction of stadiums and arenas with spectator seating. Moreover, as plays and motion pictures gained popularity, theaters were built in all but the most rural of U.S. cities, and many competed to provide patrons with the most luxurious interiors, including plush seating.

Perhaps most importantly, the development of technology in the transportation industry augmented the public building and related furniture industry. The growth of a network of railroads in the United States gave rise to the popularity of passenger rail travel. Companies evolved to provide comfortable seating for the new long-distance traveler. The invention of the automobile and its rapid rise as a major form of transportation drove the evolution of a parallel supplier industry for interior automotive equipment, such as seats. Later, the increasing affordability of passenger air travel fueled a great demand for new aircraft, with cabin accouterments and furnishings.

Current Conditions

According to Dun and Bradstreet's 2009 Industry Reports, 987 establishments employed 43,270 workers in the public building and related furniture industry in the late 2000s. Sales reached $56.6 billion in 2008. Wisconsin accounted for $38.7 billion, or more than 68 percent, of the nation's sales. Second and third were Michigan with $13.8 billion and Florida with $2.1 billion. Other top states in terms of revenue were The U.S. Census Bureau estimated that in 2005 there were 705 establishments manufacturing institutional furniture and employing more than 30,100 workers. These firms shipped $4.98 billion worth of goods that year, a slight increase over 2004 shipments of $4.7 billion. Although 86 percent of establishments in the industry employed fewer than 100 people, 93 percent of total sales came from firms that had more than 100 employees.

Industry Leaders

The largest and most competitive companies in this industry were automobile and airline seat manufacturers, which needed the working capital and financial solvency to meet the high costs of developing specialty seats built to withstand accidents. Such companies had to invest large sums in research and development, attract well-qualified engineers for product design, and budget for promotions to capture greater market share.

The companies that manufactured public building and related furniture were as diversified as their products. In the automotive industry, the main supplier of car seats was Johnson Controls Inc. Founded in 1900 and headquartered in Milwaukee, Wisconsin, this company was a major manufacturer of automobile seats but was best known as a provider of electronic control systems that regulated heating, cooling, and security for commercial buildings. The international company employed 140,000 workers in 2008. In 1991 Johnson Controls purchased Lahnwerk GmbH, a German company that supplied seat components and metal seat frames to the European auto industry. Two years later Johnson Controls acquired a similar Mexican firm, Grupo Summa. The company's 50 manufacturing plants involved in automotive seating were located in Michigan, Tennessee, and California, as well as in Portugal and Austria. Johnson Controls Automotive Division was the world's largest auto seating supplier for the major car companies. In October 1996 the company acquired Prince Automotive, which had been a smaller, yet still viable competitor. Total revenue for Johnson Controls reached $38.0 billion in 2008.

Airline seats were an integral part of this industry as a whole. Aircraft cabin seating was the largest segment in this industry. BE Aerospace Inc., with 6,485 employees in 2008, was the largest integrated supplier of aircraft cabin accessories, selling approximately 25 percent of the seat market. Headquartered in Florida, the company was founded in 1987 and expanded in 1992 when it acquired the Connecticut-based aircraft cabin seat company PTC Aerospace. With other acquisitions of cabin supplier firms that produced such components as galley appliances and video monitors, BE Aerospace provided the airline industry with all cabin products except for lighting fixtures and lavatories. More than 40 percent of the company's sales, which were $2.1 billion in 2008, came from aircraft seats.

Also serving the aircraft seating industry was Weber Aircraft LP, a Texas-based subsidiary of Zodiac Aerospac. Weber's yearly revenues exceeded $140 million in the mid-2000s, representing an annual gain of 20 percent. DeCrane Aerospace of Wichita, Kansas, provided furnishings, entertainment systems, and seating products for aircraft, along with fuel and power systems. The Brice Manufacturing unit of TIMCO Aviation Services Inc. in Greensboro, North Carolina, was also active in this industry.

The largest supplier of library furniture was Gaylord Brothers Inc., a Syracuse, New York, firm dating to the end of the nineteenth century. Gaylord was started in 1896 by two brothers, both bank clerks, who developed a gummed parchment that they marketed to libraries for use in repairing books. When the business turned a profit in 1909, the Gaylord brothers quit the bank and made their company a full-service provider for U.S. libraries. Their products included book shelving systems, magazine display units, storage facilities, librarians' desks, and patron chairs and tables. Gaylord Brothers, which became a subsidiary of the Croydon Co., marketed its products by catalog and online. The company boasted more than 42,000 different items in its product line.

Workforce

In the household and institutional furniture manufacturing industry, which also encompasses wood, metal, and nonwood household furniture, the majority of jobs were concentrated in the actual manufacturing process. In 2008 the total number of jobs was estimated at 169,490 for the industry, with production workers accounting for 69 percent of that total. The median hourly wage for production workers in the industry was $12.84. An aggregate report from the U.S. Equal Employment Opportunity Commission indicated that of 79 reporting establishments, male employees outnumbered females by more than 2 to 1, and whites outnumbered minorities by approximately the same ratio.

America and the World

In the public building and related furniture industry, seating for public conveyances such as automobiles and airline cabins represented the most common export. The costs for importing other types of furniture, such as classroom or stadium seating, proved prohibitive for many foreign manufacturers who already had successful domestic furniture industries. U.S. automotive seat suppliers such as Johnson Controls faced domestic competition from Japanese firms such as Atoma and Toyo Seat USA, and made acquisitions to expand into a lucrative foreign automobile market.

Both imports and exports were high for institutional furniture in the late 2000s. According to Supplier Relations U.S. LLC, U.S. exports in this category grew 15 percent annually between 2005 and 2008 to reach $1.9 billion. The United States shipped products in this sector of the furniture industry to 180 countries. Top markets included Canada, Mexico, the United Kingdom, Japan, and Australia. Imports, which came from 125 countries, also grew, reaching $13.1 billion in 2008.

Research and Technology

Government regulations prompted the development of technologies in the public building and related furniture industry, particularly in automotive and airline seat manufacturing. Minimum criteria for car seats, set by the National Highway Traffic Safety Administration, stipulated that seats not have parts that might injure drivers or passengers on impact and that the seat withstand the force of a crash up to a specified gravitational force, requiring seat frames made of particularly resilient material attached firmly to the car floor. Auto-seat manufacturers also were concerned with the seat's overall performance in terms of comfort, durability, and appearance. As changing demographic patterns engendered longer commuting times for many consumers, the average time spent sitting in a car seat increased. In response, researchers measured the amount of lumbar support various types of seat cushions provided, developing two methods used in the suspension of automotive seats. The most common type of seat consisted of foam block, a combination of a polyurethane cushion and springs, while another featured a light platform supported by a system of springs.

The automobile seating industry moved more toward comfort and technology. Johnson Controls Inc., for example, had a Comfort Engineering Center that developed more comfortable seats and tested the durability of the comfort features. Automobile seats of the future are expected to be smart seats that adjust according to a passenger's height, weight, and preferred seating position. Active seats will incorporate technology that adjusts according to road conditions, maximizing passenger comfort.

Government regulations, issued by the Federal Aviation Administration (FAA) and the National Transportation Safety Board, also affected the industry. The potential for extremely high impact crashes in air travel caused regulations on aircraft cabin seat construction to be more stringent than for any other area of the public building and related furniture industry. Initially, the industry resisted modifications of cabin seating, complaining that heavier anchoring components used to bolt seats to the floor added too much weight to the aircraft. The development of technology and materials in the 1980s, however, allowed seats that could withstand up to 9 g in gravitational force. In 1988 the FAA ruled that all newly certified aircraft be outfitted with such seats, and proposed that all seats aboard U.S. aircraft meet a 16 g requirement by 1995. In accordance, most seat manufacturers, including Weber, switched production to the 16 g seats by 1990.

The fabric used in aircraft cabin seats also was regulated, ensuring that cushions were fire retardant and able to serve as floatation devices. Furthermore, regulatory officials continued to monitor the number and placement of seats on aircraft, a procedure that directly affected the profits of both the airline industry and the public building and related furniture industry. As the first decade of the twenty-first century neared a close, manufacturers were experimenting with new, more creative designs for airline seating, such as seats that folded out into beds and using more vertical space for seating. In a design by Jacobs Innovations of Boston, the wasted space above passengers' heads was utilized through steps.

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