According to Smith Leonard’s Furniture Insights, after several positive monthly results from their surveys of residential furniture manufacturers and distributors, the September survey showed a 10 percent drop in new orders.

“Even though we had heard that retail slowed some in September, that 10 percent drop surprised us,” the Smith Leonard report stated. “But, as we looked at the results, we looked back to last year and realized that September 2016 new orders were up 14 percent over September 2015. So comparing September 2017 to September 2015, new orders were up 3 percent, making the results not as bad as first glance.”

For the month, some 62 percent of the participants reported decreased orders. Year to date, the new order increase dropped from 6 percent reported last month to 4 percent through September. Approximately 61 percent of the participants reported increased orders year to date.

Shipments were up 4 percent for the month vs. September 2016 and remained up 4 percent year to date. Last year at this time, shipments were only up 1 percent. Approximately two-thirds of the participants are reporting increased shipments year to date.

Backlogs were about even with August, but were down 4 percent from September 2016.

Receivable levels got back in line after being a bit high last month. Inventories were 7 percent higher than September 2016, but were up only 1 percent over August. We will need to watch as business conditions change through the end of the year.

The number of factory and warehouse employees held steady from August and was down 2 percent from last September. Factory and warehouse payrolls remained 2 percent ahead of last year in September, as well as year to date.

Existing home sales increased 2 percent in October to the strongest pace since June 2017, but remained 0.9 percent below a year ago. Single family sales were up 2.1 percent, but were still 1 percent below a year ago. Once again the lack of inventory was blamed for the slowdown, as well as some effects of the hurricanes in Florida and Texas.

New houses sold were up 6.2 percent in October from September and up 18.7 percent above October 2016. New house sales were up from last year in all regions of the country.

Privately-owned housing starts were also up from September (13.7 percent), but were 2.9 percent below October 2016. Single family starts in October compared to October 2016 were down 13.2 percent in the Northeast and 5.6 percent in the West, but were up 10.4 percent in the Midwest and up 3 percent in the South.

Sales at furniture and home furnishings stores were up 4.4 percent over October 2016. Sales at these stores were up 3.9 percent year to date.

The results from September were somewhat expected as Smith Leonard’s recent conversations, including their Market visits, had indicated that business had softened. In addition, hurricanes impacted business and even slowed some Market traffic. They would expect to see some pick-up over the next few months as those affected in Texas and Florida and other areas begin to try to recover and rebuild.

“With consumer confidence at highest levels in years, unemployment also at lowest in some time, and interest rates still low, all signs should be good for the industry. While some of the housing results are not as positive as we might want, we need to keep in mind that housing has been recovering since 2009. Eventually, as we see with our own businesses, it is hard to keep beating last year’s numbers over and over again. So we think both existing and new home sales are at good enough levels to keep furniture buying reasonably strong,” the report stated. See

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