New furniture orders in May 2020 were down 8 percent from May 2019 after a 61 percent decline reported in April, according to the July 2020 Furniture Insights report from Smith Leonard. New orders in May were up 166 percent over April.
About 19 percent of the participants actually recorded an increase in May orders over May 2019.
According to Smith Leonard, the May, April, and March results offset the fairly good results of January and February, resulting in a decline in year to date orders of 18 percent.
In May, shipments were down 31 percent after a 50 percent decline reported for April. The lower level of shipments was expected as a result of the decline in orders the last three months. Year to date shipments were down 18 percent.
Backlogs increased 20 percent over April and were 13 percent higher than May 2019 due to orders exceeding shipments, according to the Smith Leonard report. Receivable levels were 25 percent lower than last year and, considering shipments down 31 percent, seemed at least reasonably in line. Inventories fell 10 percent from April and were 6 percent below May 2019.
“The May results of our survey continued to show positive trends for continued improvement,” said Ken Smith in the report. “From what we have heard, June and July business has continued to improve with some saying that business has been better, volume wise, than last year. Of course, many folks in our industry tend to be afraid to get too excited, thinking that this “bubble” will end soon, just a matter of time.
“The reality is that some of that thought is probably true. We realize that with business basically shutting down for at least a couple of months, there would be a surge from normal business stopping then starting up again with a spurt.”
“Both the Leading Economic Index and Consumer Confidence reports indicated that in the short term, economic recovery may be slow. In fact, the term ‘recession territory’ in the near term was used. So we know that plans need to be considered for moving through the possible slower times ahead.
“The Payroll Protection Program, while fraught with all sorts of issues, did allow many in the industry to try to keep employees together. It also helped cover other costs such as rent, including things like showroom rent,” Smith said.
Also, existing home sales rebounded in June rising 20.7 percent from May but were still down 11.3 percent from June 2019 results. Single family sales were up 19.9 percent over May but down 9.9 percent from June 2019. All four regions reported increases over May although each of the regions reported declines from June a year ago.
New home sales increased 13.8 percent over May 2020 and were 6.9 percent ahead of June 2019. New home sales were up in all regions except for the South where they were down only 1.8 percent.
Sales at furniture and home furnishings stores were up 32.5 percent over May but were down 3.5 percent from June 2019. Year to date, sales at these stores were down 16.4 percent.
Have something to say? Share your thoughts with us in the comments below.