SUMMARY OF REPORT CONTENTS

In 2003, the UK Office Furniture market was worth around £734 million at MSP.The UK Office Furniture market has been volatile since 1997. In 1999, the market experienced a decline due to low business confidence and the postponement of many new office furniture projects, as a result of a referral of investment into IT for millennium compliance.

The year 2000 experienced a recovery that could be attributed to the delayed purchases from 1999. However, in 2001 the market once again saw a downturn due to fears of a global slowdown, the recession in the financial services and TMT industries and the terrorist attack on September 11^th, consequently weakening the demand for corporate office furniture. These trends escalated in 2002 with the market declining sharply.

The market further contracted due to the Iraq conflict, ongoing weak market conditions and low business confidence in key sectors in 2003 and H1 2004. However, H2 2004 has started to demonstrate a return of business confidence, perhaps marking the end of the market decline.

Future prospects are more optimistic for the Office Furniture sector in the medium term. However, despite the industry experiencing a recovery, the market is expected to remain static in the short term, due to the time lag between confidence returning and the market showing real signs of growth.

Key influences in the market included commercial property activity, ‘off-shoring’ and technological developments, rising use of flat screens or laptops, etc.  Development of technology has facilitated the growth of mobile working (‘hot-desking’ ‘hotelling’ and ‘teleworking’), relaxed constraints on desk size and shape and supported the growth of more informal working areas.

New office building also has an impact on the office furniture market, but this has been a difficult market in recent years, with a high level of availability of office space leading to low levels of new build and limited demand for new installations. 

Imports and exports represent a significant amount of value in the UK Office Furniture market with imports currently valued at £217 million and exports at £110 million.

The level of imports increased between 1998-2001, before experiencing a decline in 2002 due to the downturn in the global economy. However, imports experienced a return to growth in 2003 increasing by 3%, due to suppliers using manufacturing facilities outside the UK and importing components / ranges, in addition to retailers importing direct.

Exports have continued to decline since 1998, with the exception of 2001, which experienced a marginal increase. In 2003, imports decreased by 9% on 2002 levels as a result of the exchange rate and the unstable economic conditions globally.

In 2003, only desking experienced an increase in exports on 2002 values. However desking imports have continued to fall since 2000, while both storage/ screening and seating experienced increases in 2003. EC Countries continue to dominate office furniture imports with Italy and Germany being the major trading partners. Outside the EC, China has replaced the US as the largest supplier to the UK.

Products

The market is comprised of four separate product sectors, which includes desking (the main sector accounting for 41%), seating, storage and screening / others.

In 2003, the Desking market was worth an estimated £301 million at manufacturers sales prices (msp).  This sector consists of three sub sectors, which include executive, systems and economy stand-alone desking.

The Seating sector is the second largest product sector in the Office Furniture market and is currently valued at around £229 million. Technological advances and ergonomic development, in addition to the increased awareness of the importance of good office seating in relation to health and safety, are key motivating factors in this sector. 

In the Storage sector the trend over recent years has been towards more aesthetically pleasing wood finishes, although metal products remain the most popular for shared storage. The market is estimated to be worth £140 million, which comprises of over 30% wood products.  One of the primary drivers in the storage sector is the increased requirement for personal storage, partly due to increased employee mobility and changing working practices.

The ‘Screening/ Others’ sector incorporates both screening and other products such as computer trolleys.  This market sector is estimated to be valued at £64 million in 2003, with the continuing demand for screen systems in open plan offices mainly fuelling the sector. Computer trolleys have continued to decline in both popularity and market share.

Suppliers and Distribution

The Office Furniture market remains fiercely competitive with a large number of suppliers within the market. There has been some activity in terms of consolidation or acquisition activity and conversely divestment activity. In 2003, the top six suppliers account for 37% of the market by value, representing a decline on the 40% in 2001.The largest supplier in the UK is generally regarded as Herman Miller, with Bullough and Bisley close behind in terms of market share.

Other significant suppliers include Dams International, Steelcase, Komfort Office Environments, Senator, Samas, EFG Matthews and Kinnarps etc.

The two main distribution channels for Office Furniture are via the dealer network or direct to end users. Retail and superstore sales have increased as a result of continuing growth in the SOHO market. The mail order channel has been relatively flat in recent years, although Internet selling (included in this sector), may boost this route to market in the medium term.

Lists of Companies Mentioned

Herman Miller Inc, Steelcase, Gordon Russell Products, Bullough, Forvaltnings, AB Browallia (Sweden), Project office furniture Ltd, Workspace office solutions, Ltd’, Pentos, Flexiform, Bisley Office Furniture, Dams International, SIG PLC, Komfort Office Environments plc, EFG Matthews Office Furniture Limited, Senator International, Skandinavisk Holdings A/S (Denmark, Skandavisk UK, Arenson Group, Roneo Systems, President, Antocks Lairn, Samas-Groep, Kinnarps, Black Arrow, Logic Office Group, OEP Furniture, Ahrend, Boise office, Solutions, Paragon Business Furniture Plc, Knoll International, Gresham Office Furniture, Sven Christiansen, Verco Office Furniture, Carleton Furniture Group, ROC Office Furniture PLC, Genetix GX Ltd, Wallis Office Furniture Ltd, Pledge Office Chairs, Desking Systems / Ofquest, Deanes Office Furniture, Idem, Eurotek, Cloroquay Ltd, Dauphin Plc, WH Systems Ltd, Intoform Ltd, System B8 møbler a/s, Lamb Macintosh, Samuel Bruce Furniture ,Manchester Seating, Company ,Systems Seating International, Syba, HÅG, JSI, KAB seating, Albion Chairs, Connection Seating, Office Seating UK, RH Form, Fritz Hansen, Anco Storage Equipment Ltd, Railex Systems, Metalico, Rackline Systems Storage, OfficeSTOR, Dieffebi, ScreenSolutions Ltd, Screenbase Ltd, Screentek, RB Office Screens, Incatext, MFI Furniture Group Plc, IKEA Furniture Ltd, Furniture123, Home Working Solutions, Antler Office Furniture, PC Table, Misco, Bene PLC, Maine Group, Martela PLC, Techo UK Ltd, Morris Office, JF Nott, SMARTdesks, Power desk International, Orange box, Woodstock Leabank Office Furniture Ltd, Unit Press, Unit Press Holdings, Spicers Ltd, Kingfield, Heath, EFG Matthews Office Furniture, Georgeson Office Interiors, Claremont Business Environments, Andrews Office Furniture, Claremont Office Interiors, Axis Interiors, Oyezstraker Office Environments, Samuel Bruce Business Furniture, Banner Business Supplies, Dudley, Sinergy people, Momenta Group, OfficeSmart, Officeteam, OSTAline, Superstat, Office Club, Nemo, Integra, Office Friendly, Europa Office Ltd, OfficeStar, Officepoint., Advantia Business Solutions, Viking Direct, Office Depot Inc, Neat Ideas, Euroquipment, Global Workplace Equipment & Furniture, Great Universal Stores,  Littlewoods, Grattans, Freemans, space2, Office-Furniture.org.uk, Euroffice, SuppliesOnline, The Office Shop, OSO, Staples UK, Office World, PC World, The Business Superstore, Habitat, Courts, Marks & Spencer, Woolworths, John Lewis, House of Fraser,.Splash Power, BT, Lloyds TSB, Garlands Call centres, ASDA, Harrow Green, IBM.