U.S. office furniture orders, shipments plunge in January
(Reuters) - U.S. office furniture orders and shipments fell about 25 percent in January, reflecting the biggest year-over-year percentage declines since the 2001-02 recession, a trade group said.
The Business and Institutional Furniture Manufacturers Association said January orders fell 25 percent to $565 million and shipments fell 26 percent to $630 million.
BIFMA also lowered its 2009 forecast for orders to a decline of 26.5 percent, compared with its prior estimate of a drop of 11.6 percent.
It now sees shipments falling 19.3 percent versus its previous forecast of a decline of 13.1 percent.
BIFMA compiled its January report from 38 companies that account for about 75 percent of the industry's volume.
"Virtually all relevant economic drivers and leading indicators of office furniture consumption are declining and in many cases have reached unprecedented levels," Raymond James analyst Budd Bugatch wrote in a note.
White-collar employment continues to deteriorate while office vacancy rates are increasing, he added.
"While Street estimates may still be too optimistic, we suspect 2009 will ultimately mark the trough for earnings (though perhaps not for revenues)," said Bugatch, who expects easing commodity costs to offset lower volumes.
The analyst maintained his "outperform" rating on Herman Miller Inc (MLHR.O) and Knoll Inc (KNL.N) and his "market perform" rating on Steelcase Inc (SCS.N) and HNI Corp (HNI.N).
(Reporting by A.Ananthalakshmi in Bangalore; Editing by Amitha Rajan)
