Wood Office Furniture

SIC 2521

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in manufacturing office furniture made chiefly of wood, including benches, bookcases, cabinets, chairs, desks, filing boxes and cabinets, panel furniture systems, stools, tables, partitions, and modular furniture systems.

Industry Snapshot

According to the Business and Institutional Furniture Manufacturer's Association (BIFMA), a leading trade group, product values for the office furniture industry as a whole totaled approximately $11.1 billion in 2008. This was the first year since 2003 in which production values actually declined, albeit slight (2.3 percent). 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. Wood products consistently comprised about one-quarter of total office furniture sales in the mid- to late 2000s.

Organization and Structure

Western Michigan, most notably in and around the cities of Grand Rapids and Holland, was home to office furniture manufacturing giants Steelcase Inc. (whose product line focused on nonwood rather than wood furniture), Haworth Inc., and Herman Miller Inc., as well as a number of other firms. As a result, the area could boast that its facilities produced about 65 percent of all office furniture manufactured in North America. This dominance could be attributed to an abundant supply of good quality hardwood in Michigan forests during the industry's early years and the availability of highly skilled woodworkers.

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 increased and the market became more specialized and sophisticated, the major manufacturers developed their own sales staffs and dealer networks to handle large-scale orders. In addition, the introduction of new products such as computer desks and "systems furniture" (consisting of panels and other pieces that could be easily moved and reconfigured to accommodate changing needs) generated a need for office designers. As a result, 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.

In the 1990s, although a few manufacturers still sold directly to customers, most relied on other means of distribution. Distribution channels had shifted during the 1980s. According to a joint survey conducted by BIFMA and the Business Products Industry Association, nearly one-third of sales went through channels such as office products megadealers, superstores/warehouse clubs/other mass merchandisers, wholesalers, mail order, and the government. Superstores, warehouse clubs, and other mass merchandisers showed the strongest growth. In 1993 they represented 2.8 percent of total distribution; by 1996 they accounted for 6.3 percent of the total.

Office furniture manufacturers of all kinds showcased their newest products and services at a number of trade shows around the country, most notably the NeoCon World's Trade Fair. Held annually at the Merchandise Mart in Chicago, it is billed as North America's largest commercial interiors exposition.

Background and Development

The wood office furniture industry first began to take shape in the late nineteenth century, a period of rapid industrial growth in the United States. This industrial growth, along with technical innovations such as the elevator, the typewriter, and the telephone, sparked a corresponding increase in the number of people working in offices. Manufacturers of residential furniture soon began to notice that more of their desks, tables, and bookcases were being put to use in a business setting. Some of them responded by designing and building pieces specifically suited to the needs of this new kind of employee, thus establishing office furniture as a separate segment of the overall furniture industry.

Wood dominated the market until the 1930s, when metal filing cabinets and desks became popular, less expensive substitutes for the wooden models. The military's need for steel briefly interrupted this trend during World War II, but in the postwar years metal office furniture once again became a serious threat to wood. Both sides responded by launching aggressive marketing campaigns emphasizing the advantages of their respective products.

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. By the early 1960s the distinctions between the two industries had blurred to the point where the wood furniture manufacturers dissolved the trade association they had originally established to distinguish themselves from metal office furniture manufacturers. In 1973 office furniture manufacturers of all types officially recognized their common interests and concerns by joining forces in a single trade organization, the Business and Institutional Furniture Manufacturers Association (BIFMA). By 1997 BIFMA represented more than 140 North American office furniture manufacturing companies located throughout the United States, Canada, and Mexico.

Growth was especially strong in the office furniture industry in the late 1970s and early 1980s, with average annual sales gains of 19 percent. Beginning in the late 1980s, however, significant white-collar downsizing in a number of Fortune 500 companies had a marked impact on office furniture manufacturers because fewer employees translated into less need for new desks, chairs, and other equipment. A recession in 1991 and 1992 added to the industry's troubles, resulting in an 8.5 percent drop in the value of shipments in 1991 from the previous year. The picture began to improve a bit in 1993, with shipments of wood office furniture showing a slight increase. Virtually no one, however, was forecasting a return any time soon to the strong growth of the early 1980s.

By 1997 there were approximately 676 wood office furniture manufacturers, who employed nearly 31,000 workers, according to the U.S. Census Bureau. Industry analysts continued to be cautiously optimistic in their predictions for the office furniture manufacturing industry as the 1990s ended. Steady interest rates, a moderately growing economy, and low inflation all seemed conducive to a sustained period of modest sales gains in the range of 4 to 5 percent. Nevertheless, many wood office furniture manufacturers reassessed their markets in the middle of the decade, noting that the strongest demand for office furniture was coming from small companies with limited budgets and a desire to stretch their dollars as far as possible. The high-end products that large corporations typically purchased were simply out of reach for businesses with only a few dozen employees. A number of the major manufacturers responded to the situation by creating new lines of mid- and low-priced furniture.

Wood office furniture manufacturers also began exploring new niche markets for their products during the 1990s. With an estimated 43 million people doing at least some work out of their homes as of 1996, companies looking for ways to expand their traditional customer base offered more and more pieces intended for home offices. Another growth market was ergonomically designed furniture, which client companies hoped would increase productivity, cut down on the number of repetitive strain injuries and backache (thus curbing health care costs), and reduce the threat of lawsuits from employees with work-related disabilities.

Industry observers also continued to express concern about the common practice of price discounting as much as 50 percent or more in a fiercely competitive market. Because it drained financial resources, discounting was blamed for the rise in the number of buyouts and mergers that occurred in the office furniture industry during the 1990s. The small company with a foothold in a niche market that a larger competitor wished to enter proved to be especially vulnerable to this kind of takeover. Major acquisitions were made by HON Industries Inc., Kimball International, and Haworth throughout the 1990s. Some companies did consolidate, though, such as Herman Miller in the late 1990s. Many companies called for an end to discounting and price wars, listing them among the greatest challenges the industry faced in the 1990s.

In a related action, office furniture manufacturers also joined to fight for legislation to eliminate the competitive advantage enjoyed by the Federal Prison Industries (FPI) over private companies. 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.

In addition, wood office furniture manufacturers expressed apprehension about the effect of ongoing environmental legislation on their bottom lines. They already incurred increased costs in their factories for disposal of hazardous waste generated by the furniture-finishing process. They also had to abide by strict rules governing wood dust levels. In the marketplace, they faced mounting concerns about the effect of various pollutants on indoor air quality. Under the terms of the Clean Air Act Amendment of 1990, for example, various substances involved in the production of wood furniture were subject to regulation. Most commonly cited were the volatile organic compounds used in finishes and two types of adhesives, urea-formaldehyde resins and contact adhesives. To address these problems, some U.S. wood office furniture companies switched to water-based finishes and alternative glues, although some of these substitutes performed poorly.

With the market size shrinking, competition in the industry rose sharply during the early 2000s. Reducing costs and increasing operating efficiency became of primary importance for manufacturers, whose customers became increasingly price and service conscious. Accordingly, low cost, ready-to-assemble manufacturers fared better than traditional furniture manufacturers in that climate. A growing office furniture recycling and refurbishing industry, with more than $1.2 billion in sales, may also prove significant competition for manufacturers of new office furniture.

The office furniture bubble burst in 2001. During the height of venture capital enterprises and dot-com technology companies in the late 1990s, the office furniture market had enjoyed great success in outfitting these start-up firms. When the technology industry crashed, however, the office furniture market dried up. The terrorist attacks on the United States of September 11, 2001, led to further economic softening and widespread corporate layoffs, and had a negative impact on new office construction. In 2002, the office furniture industry suffered a record decline of 19 percent in shipments to $8.9 billion. Employment plummeted 23 percent, to 58,000 workers, between 1997 and 2002.

U.S. production dropped further the following year, then finally reported growth in 2004. In 2006, after three straight years of increased production, the U.S. office furniture market reached $10.8 billion, slightly shy of its 1997 levels.

Despite this rebound, office furniture manufacturers faced challenges in the mid-2000s. In addition to continued corporate downsizing, these included adjusting to the increasingly limited supply of wood and the subsequent rising price of wood and wood-based panels. This situation was compounded by the wide availability of inexpensive imports, primarily from China. Another challenge was developing more products for home use in a market that was increasingly dominated by ready-to-assemble (RTA) furniture companies such as Sauder Woodworking Co. On the labor front, industry players also were concerned about the shortage of skilled workers (especially wood experts) and the need to work more efficiently to cut manufacturing costs.

Additionally, in conjunction with the Environmental Protection Agency (EPA), the industry was developing new environmentally safe flame retardant additives to replace the controversial pentaBDE that was phased out of production and use in 2004. Polybrominated diphenyl ethers, of which pentaBDE was a commonly used type, were found to be easily absorbed by animals, including humans, residing in the general area of furniture containing the chemical.

Recovery from the collapse of the dot-com boom in the early 2000s, which artificially inflated the office furniture market, was slow but steady for furniture companies. Production by U.S. manufacturers rose 7.4 percent in 2006 to reach $10.8 billion, a level the industry had not reported for nearly a decade.

Several factors boded well for the office furniture industry in the mid-2000s. An increased focus on the health care and education markets was one of the most significant. By 2030, some 72 million U.S. citizens will be older than age 65. To accommodate this growth in an aging population, the health care industry will have to build nearly half a million patient rooms. "This works out to a 322-bed hospital constructed every week for the next 25 years," according to The Grand Rapids Press. In 2006, Steelcase Inc. launched a subsidiary, Nurture by Steelcase, to tap into this market by providing furniture for patient rooms, nurse's stations, waiting rooms, and other medical uses.

The higher education market was also expected to be ripe for office manufacturers. A decline in student admissions led to increased competition among colleges, many of which were expected to improve their decor and furnishings to appeal to prospective students.

Current Conditions

According to Dun and Bradstreet's (D&B) 2009 Industry Reports, 1,316 establishments operated in the manufacture of wood office furniture in the United States in the late 2000s. Michigan accounted for 15 percent of the 30,334 people employed by the industry. Other top-employing states in this category were Indiana, California, North Carolina, and New York. Total annual sales for the industry reached $4.7 billion in 2008, according to D&B. Michigan was the number-one state in terms of revenues as well, with almost $2.1 billion in sales, or about 44 percent of the nation's total. Pennsylvania was second with $1.1 billion in sales, followed by California ($290.6 million), North Carolina ($117.3 million), and Virginia ($113.7 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.

Industry Leaders

Herman Miller, Inc.
Publicly traded Herman Miller Inc. of Zeeland, Michigan, was one of the top wood office furniture manufacturers in the late 2000s. Known for its innovative and ergonomic products, Herman Miller posted sales of $1.6 billion in 2009.

Herman Miller was founded as a residential furniture manufacturer in 1923 by D. J. De Pree. He used money borrowed from his father-in-law, Herman Miller, to buy the Star Furniture Co., which had been in existence since 1905. De Pree then renamed the firm in honor of its major shareholder.

During the Great Depression, Herman Miller struggled to compete with larger local manufacturers, most of whom were turning out reproduction pieces. To make his company's offerings stand apart from everyone else's, De Pree introduced a collection of furniture with a distinctively modern flair. Innovative design soon became a hallmark of the Herman Miller line of office furniture, some pieces of which were created by notables such as Charles and Ray Eames and Isamu Noguchi.

In the mid-1960s Herman Miller once again revolutionized the industry by introducing systems furniture. Its panels, storage units, and work surfaces made it simple to rearrange and customize open-plan office spaces. Since then, the company devoted considerable research and design efforts toward developing ergonomic seating and other components that fulfilled the need for comfortable and multifunctional office furniture. Herman Miller also branched out into manufacturing furniture for hospitals and other health care facilities and entered the residential office furniture market as well with a line called Herman Miller for the Home.

For almost its entire history, Herman Miller was known as an unusually progressive firm in terms of its treatment of employees. In 1950, for example, it became one of the first companies in western Michigan to institute a participative management program so all workers were involved in setting goals for the firm, making suggestions for cost cutting and other improvements, and sharing in the profits. As a result, Herman Miller consistently ranked among the most admired companies in the United States.

The boom in office furniture sales in the 1980s led to record sales at Herman Miller in 1990. However, a recession hit the following year, and by 1992 the company had posted the first loss in its history. It then began restructuring in an effort to combat the negative impact of the recession and decreased demands for its high-end products. With operations in more than 40 countries and 5,299 employees in 2009, Herman Miller continued efforts to compete more effectively in the marketplace by cutting jobs (including many in the executive ranks) and shutting down plants that failed to meet performance expectations.

Haworth, Inc.
Another large wood office furniture manufacturer was Haworth, Inc., a private company headquartered in Holland, Michigan. The firm had estimated 2007 sales of $1.6 billion and 8,000 employees. Teacher Gerrard Haworth started the firm in 1948 in his garage, enjoying modest success with his wood and glass office partitions. Haworth's son Richard patented a prewired, movable office panel in 1975 that made it possible for customers to assemble and disassemble work stations to create new office arrangements without calling an electrician. Before long, Haworth had vaulted into the top ranks of office furniture manufacturers. It aggressively defended itself against patent infringements by competitors, winning millions of dollars in damages from both Herman Miller and Steelcase over its prewired office panel.

In 1988 Haworth began to pursue an ambitious policy of acquisition, buying a number of smaller companies at home and overseas to broaden its product base and distribution channels. One of Haworth's acquisitions was the German company dyes, which specialized in desks and work tables. While making these acquisitions, Haworth paid very close attention to the bottom line. As a result, the company enjoyed a reputation for being one of the leanest and most profitable businesses in its category, with a solid manufacturing, marketing, and distribution presence throughout the world and a reputation for undercutting its rivals on price. The products manufactured and sold by the firm included a full line of systems furniture, desk and guest seating, steel and wood casegoods (bookcases, cabinets, and other pieces that provide interior storage), files, tables, and desks. Haworth made these items available in nearly all price ranges but was increasingly emphasizing its less expensive lines.

HNI Corp.
Another notable wood office furniture manufacturer was HNI Corporation, formerly known as HON Industries, in Muscatine, Iowa. With 2008 sales of more than $2.4 billion, HNI was considered the leading manufacturer of value-priced office furniture. It was a highly diversified company that designed and built mid-priced products for both office and home, including desks, chairs, file cabinets, credenzas, storage units, tables, bookcases, partitions, and panel systems. It also manufactured metal office furniture. The company employed about 12,200 workers in 2008.

Other Leaders.
Sauder Woodworking Company of Archbold, Ohio, was the leader in the trend of ready-to-assemble (RTA) furniture, which had traditional office furniture manufacturers looking over their shoulders. This inexpensive but serviceable alternative to traditional office furniture was fueled in part by the rise in home-based businesses. Some estimates put the number of Americans who worked at home at least part-time at more than 40 million. The number of strong players in this market continued to grow. Sauder had estimated 2007 sales of $700 million and about 2,700 employees. It also operated in the fully assembled furniture market following the acquisition of Progressive Furniture in 2001.

Although Steelcase Inc. was best known for its nonwood office furniture, this major manufacturer also produced a variety of wood office systems and furniture. Based in Grand Rapids, Michigan, Steelcase had sales of $3.1 billion and 13,500 employees in 2008.


Since 1988, employment has steadily declined in all sectors of the office furniture manufacturing industry. The wood segment experienced the most significant losses. 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

The passage of the North American Free Trade Agreement in 1993 opened the doors to anticipated heavier volume of office furniture imports and exports. Overall, however, imports and exports of wood and nonwood office furniture continued to make up a small percentage of total industry shipments. 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.

The growing popularity of Swedish furniture maker IKEA International, both in the United States and abroad, was another factor in wood office furniture sales. IKEA saw sales rise from $22.2 billion in 2006 to $31.0 billion on 2008 and had almost 300 stores in 50 countries. It offered stylish, affordable, (usually) RTA furniture, for both the home and the office.

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 most of their research budget to the development of multifunctional, ergonomically designed products. In larger offices, for example, cubicle clusters and movable panels were 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 was also a top priority.

Ergonomics was at the forefront as well 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. 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, since home office space might be very limited and pieces had to blend with home furnishings. For this reason, manufacturers were putting work centers and other components on wheels for portability, inventing desks that folded out or swung open for working and then closed to hide office equipment, and creating 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.

News and information about Wood Office Furniture

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