Market
Conditions in North America
3 April, 2007
Business is very
strong in the U.S. and Canada for store fixture suppliers and providers of
visual presentation products. Our statistics show that the fixture industry has
enjoyed strong growth for the past three years and 2007 looks equally
promising. Specifically, the industry grew 12.5% in 2004, 11.6% in 2005, an
estimated 11% in 2006, and according to our NASFM Revenue Trends Survey the
industry will grow by 10% in 2007. We are not yet able to project profitability
for 2006 or 2007. However, we do know that the typical company in our industry
had a 4.2% profit before taxes in 2005.
Trends of the
last few years continue into 2007. Specifically, international sourcing —
particularly from China — grows every year. We estimate over 90% of our North
American members are sourcing some items in China. An increasing number have
set up offices in China. Some have invested in joint ventures, and a select few
own manufacturing facilities outright.
There have been
very few bankruptcies in the industry in the last three years, and as yet there
is no pattern of consolidation similar to what the industry experienced in the
late 1990s. The single biggest concern of industry CEOs this spring is rising
healthcare costs.
NASFM is at an
all-time high by many measures. We now have over 825 member companies that
include not only store fixture manufacturers and their suppliers, but also
producers of visual presentation products (the former NADI) and retail design
firm members. We also now administer the industry educational foundation PAVE.
During 2007 we will be working with a marketing and design firm to “re-brand”
NASFM – The Retail Environments Association to better reflect the growing
diversity of our membership.
At the presentation
of the above report on the ISO Congress in Rimini, Italy, 28 April 2007,
Klein Merriman,
director of NASFM and Management Committee member of ISO added:
We have noted,
that reverse auctions has come to stay – they have spread to Europe, but apart
from that does not seem to spread further. We experience very few bankruptcies,
but also few consolidations. A worry is the increasing demand for and cost of
healthcare.
NASFM today has
more than 800 members including design companies.
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