Overall 2012 holds moderate promise of growth but the success or failure will be determined by you far more than by the market conditions. Overshadowing the national numbers is the influence of regional conditions and unless you are marketing on a national basis your particular region could be significantly stronger or weaker than the national projections.

 

The projections for 2011 were for the most part accurate. Office furniture did outperform BIFMA’s projections by a nice margin. Production was forecast to grow by 8.3 percent and consumption by 10 percent over 2010. Those numbers are now expected to be 14.6 percent and 14.3 percent respectively. That is a very encouraging surprise. However, 2012 is being seen as a relatively flat year with a drop of 1.7 percent in production with growth in consumption of 1.3 percent.

 

Looking at housing starts in November 2011, private housing seasonally adjusted was at 685,000 units vs. 551,000 in November of 2010. Completions for single family homes in November were 542,000 vs. 551,000 a year ago. 

 

KCMA’s most recent data for September 2011 show a possible trend that could be mildly encouraging. Year-to-date rates compared to 2010 are down overall by 2.2 percent. However, September performance showed semi-custom up 5.7 percent over a year earlier, up 2.7 percent for custom and a drop in stock cabinets of 1.3 percent. It might not be party time, but it does offer some encouragement.

 

Now that I have noted a lot of data that none of us can change, the real issue is what will each of you do to improve your results in 2012?

 

Here are a few thoughts. First, focus on your customers! Are you providing the highest value to them? Their interpretation of value includes the entire customer experience from the pre-order phase to the follow-up phase and this applies to every segment of our markets from kitchen cabinets to custom millwork to store fixtures.

 

Those of you in regional markets that are underperforming need to expand your market area. You can do that with new or different products and/or expanding into regions with more growth. If you choose not to do either your future will be controlled by the market, not by you.

 

The most common reaction to tight markets is to reduce costs in an effort to increase sales. If you take that route, be certain you know what your true costs are and pay very close attention to your cash flow.

 

The good news — we all weathered last year and the signs indicate a marginally better year ahead!