HIGH POINT, N.C. -- According to Smith Leonard’s latest survey of residential furniture manufacturers and distributors, new orders in June 2019 were 6 percent below orders in June 2018. This marked the fifth month in a row that orders fell below the same month from a year ago. Some 64 percent of the participants reported lower orders compared to the prior year, according to Furniture Insights, Smith Leonard PLLC’s industry newsletter for August 2019.
June 2018 orders were up 5 percent over June 2017. Year-to-date, new orders fell to 3 percent lower than same period in 2018 with 70 percent of companies reporting lower orders year to date.
Shipments in June 2019 were down 4 percent from June 2018 in the Smith Leonard survey. Year to date, shipments were about even with the same period last year. Last year, shipments through June were up 3 percent. For the year to date 2019, some 58 percent of the participants were reporting lower shipments.
Backlogs in June were down 5 percent from last year, 3 percent lower than reported last month. Receivable levels seemed to be back in line considering the above shipment levels with participants reporting receivable levels about even with last June and up 1 percent from May, according to the Smith Leonard survey. Factory and warehouse employee levels were down 3 percent from last year but payrolls year to date remained 2 percent above last year for the first six months.
“We hate to sound like we are repeating ourselves, but for the most part, most of the residential furniture business from the domestic manufacturers and distributors has been sluggish at best,” Smith Leonard commented. “While 2018 was a decent growth year that followed several years of increased business, five straight months of declining incoming business is a concern. Shipments were slower as well but only buoyed by eating into backlogs.
“In our talks with others in the industry, we continue to wonder, with all the normal factors that seem to help furniture sales, why business is not better? Maybe it really is that consumers are spending, but instead are choosing the gadgets and other tech items that seem more exciting and provide instant gratification. These purchases also do not require any remodeling or painting … that sometimes accompany furniture purchases.”
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