Survive and thrive by adjusting to
Written By Rob Kirkbride, Write Office • August 8, 2022
Special-T - Sienna
Sienna tables add high-end design and durability to one of the industry's most popular hospitality style tables. The Sienna table is ideal for coffee shops and breakrooms. It is also available in conference and training table versions.
Magnuson Group - JOULE
OULE is a colorful, comfortable indoor/outdoor chair marked by clean design and a soft rounded backrest.
Magnuson Group - UMEA
UMEA is a receptacle family unmatched in its versatility. Constructed of painted steel and suitable for both indoors and outdoors, UMEA models can be 1, 2 or 3-compartments wide – each with selectable top inserts and corresponding front graphics.
ezoBord - Baffle Cloud
Providing a three-dimensional vibrant ceiling and absorbing unwanted noise, ezoBord’s Baffle Cloud system is an easy to install acoustical solution available in various styles and forms.
Featured Brand: Special-T, Magnuson Group, ezoBord
When the going gets tough, the tough get going. And by most measures, the economy is getting a little tougher these days. No need to panic though. There are some things both agile dealers and manufacturers can do to stay ahead of any economic uncertainty.
The key word is agile. Agility is an underrated attribute for any business, but that’s especially true when the market is shifting so dramatically. From different work styles to macroeconomic pressures, both dealers and manufacturers are left wondering where to go from here.
I’ve covered two major downturns (2000 and 2008) and a number of smaller ones over the last 25+ years following this industry and the companies that have survived and thrived during times of enormous change are those who moved quickly and adjusted to market changes. Those who “stay the course” are destined to go off it.
Whether you are a dealer or a manufacturer, it’s time to add some new skills (and additional markets) to your arsenal. Healthcare, education, hospitality and (to some extent) government are markets worth exploring as the economy slows.
Here’s why: All of them are strong right now, even as corporate work slows some.
While all of the aforementioned markets take some specialized skills, they are not so far afield from corporate that make them impossible to explore. All of these markets are still somewhat flush — healthcare and education with what’s left of the government’s COVID money, hospitality as it catches up on work put off during the pandemic and the government, well, it never really stops spending, does it?
Let’s look at the opportunities in each market individually.
Hospitality — Midway through 2022, the hotel industry continues to make strides toward recovery, with nominal hotel room revenue and state and local tax revenues projected to exceed 2019 levels by the end of this year, according to the American Hotel & Lodging Association (AHLA)’s 2022 Midyear State of the Hotel Industry Report. Hotel room revenue is projected to surpass $188 billion by the end of 2022, eclipsing 2019 figures on a nominal basis.
Healthcare — Healthcare is a bit more complicated than hospitality, but it is still a market worth exploring. This is from a story on Marketwatch last week: “You’re tempted to increase exposure to stocks because of the market’s strength. But you’re still gun shy because of the painful selloff. Plus, you’re worried about a recession. What to do? Buy healthcare stocks. They have plenty of defensive characteristics that help them outperform in recessions and late in economic cycles. But they also generate a lot of growth.” And consider this: “Health care is our top sector amid heightened macro uncertainty,” said Bank of America strategist Savita Subramanian. “We believe the sector is well-positioned amid looming recession risks.”
Education — According to a Zion Market Research study, the U.S. Education industry garnered revenue of about $1.1 trillion in 2020 and is set to earn revenue of nearly $2.3 trillion by 2028. Moreover, the U.S. Education Market is poised to grow nearly 4.5% between 2021-2028. “Upgrading of (the) education system in the U.S. will proliferate (the) expansion of the U.S. education industry. Launching new technologies in the U.S. education sector will accelerate U.S. education market expansion.”
Government — Government spending in the United States decreased to $33.18 trillion in the second quarter of 2022 from $33.34 trillion in the first quarter of 2022. That’s still a lot and well above historic levels. During the COVID crisis of 2020, federal spending ballooned to 31% GDP, state spending was estimated at 9.4% GDP and local spending was estimated at 9.7% GDP. Federal spending for FY2021 was 29.7% GDP. Estimated state spending for 2021 was 9.7% GDP. Estimated local spending for 2021 was 9.7% GDP. Again, government spending is slowing a bit, but governments are still spending a lot, including on furniture purchases.
It would be easiest for you to do nothing and hope the market returns. But I can tell you from experience that the companies who are able to adjust and meet the furniture buyer wherever they are will best ride out any economic downturn we might face. Take it slow, do your homework and look into these markets going forward. It is better to be safe than sorry.
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