Last updated on May 13th, 2019 at 02:21 pm
Office interior sales shrink, services increase during down economy
Depending on your outlook in life — is the glass half full or half empty? — the office interiors industry is doing rather well, relative to the overall economy, or it’s suffering along with the rest of the US economy. Upon further analysis, it really depends on what part of the office interiors industry one looks at to see if it’s up or down.
New furniture sales are down, according to two Milwaukee-area executives in the industry.
“We’re kind of seeing a boom in services and a slowdown in product sales,” said Dave Schlapman, vice president of sales and marketing for Forrer Business Interiors, in Glendale. “They’re tending to wash each other out, although not completely. It’s still more to the negative because of the slowdown of product sales.”
Schlapman correlates part of the slowdown in new office furniture directly with a slowdown in the leasing market in the area.
But with a slowdown comes companies cutting back and consolidating space or moving into smaller space, which means more work for the service-side of the interiors business.
“As a whole, our construction department right now is extremely busy,” says Gary Zimmerman, co-owner of Creative Business Interiors. “The guys have a lot to estimate, and we’ve hired additional carpenters.”
Zimmerman said that because Creative Business Interiors is diversified in its approach — the firm has departments for construction, painting, new furniture sales and electrostatic painting — it has enabled the company to thrive in the down economy.
Both men agree that being located in Milwaukee helps, too.
“The nice thing about the Milwaukee area is that it doesn’t have the big swings that some of the major markets have,” Zimmerman said.
The fourth quarter is also a relatively busy time for the office interiors industry, according to Schlapman, because company officials need to use the funds left over in their annual budgets. Consequently, Forrer crews are working on a substantial backlog of new installation work at the end of the year.
The slowdown has increased competition in the industry as “outside” construction firms, like general contractors, try to compete with traditional interior businesses, which makes pricing tighter on projects.
“They’re not finding as much in their markets, so they’re coming in and competing on tenant remodels,” Zimmerman notes. “And it’s hard for them because they don’t know how to gear up for a fast-paced, short-term project. They’re used to building buildings from the ground up.”
On the plus side (for those of you in the glass-is-half-full category), the down economy has made it easier on businesses looking for qualified personnel.
“Employers can be very picky and very demanding of the people they do find,” said Zimmerman. “I think that there were a lot of large projects that were going on like the stadium (Miller Park) and the Wisconsin Center. And a lot of the large projects have been completed. They were employing a lot of people who are now off those large projects and out into the job market.
“Think of just the number of guys painting on those two projects — hundreds and hundreds of people,” Zimmerman said.
Another positive of the down economy is that rough times separate the bad companies from the good.
“When the economy’s bad and times are tough, you need to manage your business well, you need to manage your people well and you need to manage your money well,” Zimmerman says. “And I think when the economy gets like this, it’s really weeding out the companies that have just been riding high on the tide and not managing their businesses the way they should be.”
Dec. 21, 2001 Small Business Times, Milwaukee