HIGH POINT, N.C. — New orders for residential furniture dropped 3% in May compared to 2023 figures, reversing the recent trend of year-over-year growth, according to the latest issue of Furniture Insights. Approximately half of the survey participants, however, reported increased orders in May compared to a year ago.

Year to date through May 2024, new orders are up 6% compared to 2023, said Mark Laferriere. assurance partner at Smith Leonard, which produces the monthly report.  New orders were once again flat, compared to April, he added.

"Shipments are again materially in line compared to last year, with May 2024 down 4% from May 2023 (had been up 2% in April), and flat compared to April 2024," the analyst noted. Shipments were down for approximately 75% of the participants compared to May 2023. Year to date through May 2024, shipments are down 8% compared to the same period of 2023. Backlogs were down 6% compared to May 2023, and down 1% from April 2024.

"Receivable levels were down 6% from May 2023, which is materially in line with shipments for the same period and year to date 2024," Laferriere noted. "Inventories and employee levels are again materially in line with recent months, but down from 2023, indicating that companies have aligned levels to match current operations."

On a seasonally adjusted basis, sales at furniture and home furnishings stores were up 0.6% in June from the previous month, but down 4.0% from May 2023.

"Well, there was certainly no shortage of interesting storylines since last month, with a high-profile retail bankruptcy, ocean freight concerns, interest rate cuts on the horizon, and changes to the political landscape here in the states, among other things," Laferriere commented, referencing the Conn's/Badcock bankruptcy and the latest World Container Index that indicates spot rates decreased 1% overall last week, including a 3% reduction in the Shanghai to Los Angeles route.  

"Overall, the national economic indicators we track are again 'mixed' in June/July 2024 with little meaningful change compared to recent months, but the general consensus appears to be that consumers are cautiously optimistic, but anxious about what the future holds.

"Looking at our monthly stats for the last few months, it’s probably worth noting that new orders, shipments, and backlog have pretty much stayed within a 0-5% range for our participants, which if nothing else, provides companies with some stability with which to manage operations until these other factors work themselves out," he added.