The market for office furniture has been extremely volatile over the last ten years, primarily in response to the general state of the UK economy, but also specifically in line with trends in the commercial construction market.

While in 1990, the overall market value was estimated at £850 million, this figure declined dramatically over the following two years, before showing signs of recovery from 1993 onwards. Even by 1996, the market had still not recovered to the 1990 level and stood at an estimated £790 million. In 1997 however, there should be strong growth with the market possibly reaching the £850 million level.

Beyond short term trends due to the economy, demand for office furniture has also been shaped by the increasingly electronic nature of the modern office. Firstly, office systems must increasingly adapt to desktop PCs and peripherals (printers, faxes, modems, CD-ROM drives) in terms of space, as well as the need to incorporate extensive cabling. Secondly, the role of the office itself is changing. Increasingly, staff work wherever they happen to be using laptops and mobile phones; the office is therefore increasingly becoming a base to visit, rather than a permanent work location.

As a result, offices are becoming less territorial, in that a visiting employee might work from any workstation (defined here as a work area, not as a personal computer), rather than one dedicated desk and chair.

This changing usage has boosted demand for ever more flexible and adaptable office interiors and furniture systems, but may in time reduce the need for large commercial offices as more people work at home and in transit. However, this development is sometime in the distance for many sectors where the bulk of demand continues to be for standard, good value furniture products.

Desks and tables represent the largest sector of the market, accounting for just over 40 percent. Demand for seating has shown the highest growth in recent years reflecting trends to higher quality products. The prime motivating factor for this has been changes arising from EU directives, which determine the level of seating adjustability for VDU operatives, and have resulted in many companies upgrading their seating arrangements to comply with the new regulations in recent years.

Sales of filing and storage products have grown to an estimated £155 million in 1996, with relatively strong growth in personalised storage. Many industry experts have forecast a decline in the need for paperwork and hardcopy filing. However, in reality, this has not happened. While central storage systems are less popular, individuals generally require a wider range of storage space for disks, manuals, computer accessories etc.

The SOHO market has been a growth area in recent years and an NOP survey commissioned by MAPS for this report indicated 34 percent of households now own a computer. This has helped stimulate the ownership of a wide range of office furniture at home, with 50 percent household penetration for desks, 29 percent for adjustable seating and 27 percent owning a filing cabinet.

The growth in contracting out a wide range of services and the greater flexibility of computers and telecommunications have encouraged home-working for a wide range of professional people. This trend has developed rapidly since 1990, with the recession causing many companies to look at their overhead structure and introduce more flexibility into their costs by sub-contracting some services.

Distribution of new office furniture is either direct from the manufacturer, via a dealer network or through a retailer. Contracts for equipping new office buildings usually pass through design consultants, contractors and architects, who generally buy direct from the supplier.

Dealers handle around 60 percent of office furniture sales and specific dealers are frequently chosen as agents by specific manufacturers. Superstores and mail order operators, such as Viking and Office World, have taken share in recent years, primarily supplying into the SOHO sector.

The effects of the recession have greatly assisted the development of the second hand office furniture market, especially as second hand stocks have been vastly enlarged by the growing numbers of bankruptcies and subsequent office clearances. Much of this recycled stock emerges through auctions or via the network of dealers who will sometimes offer both new and good quality second hand products. Growing business and consumer confidence may adversely affect the second hand market and encourage buyers to purchase new products.

The supply structure is relatively fragmented with no single supplier commanding more than 10 percent of the market. Bullough Group (Project, Pentos), Steelcase Strafor, Skandinavisk, Herman Miller, Samas Roneo etc are all leading suppliers and indicate the growing international structure of the industry. However, there are also a large number of specialist suppliers typically with market shares of around 1-3 percent who are successful and profitable operators.

Future prospects for the office furniture market look relatively optimistic, with overall sales forecast to grow towards £1 billion by the end of the decade. Continuing economic prosperity coupled with further recovery in the commercial construction market should continue to provide a sound underlying framework for growing demand for office furniture.

User requirements are changing to meet the demands of the office environment for the 21st century and these will generally have a positive effect on the market. Growth of at least 3-4 percent per annum in real terms should be achieved and this may prove pessimistic if the recovery in commercial construction increases momentum. The furniture market was very volatile in the late 1980s early 1990s and, while these conditions are unlikely to return in the short term, market growth may prove more buoyant if the commercialservice sector continues to have its current rate of growth.