New orders for residential furniture continued showing extreme growth, rising 96 percent in March 2021 over March 2020. This marks 10 straight months of year-over-year double-digit increases, as reported by Smith Leonard in the latest issue of Furniture Insights.
Smith Leonard also opted to look at 2019's data, as the pandemic began to be felt in March 2020 - making it hard to make comparisons.
"Since the pandemic really began to be felt in March 2020, part of the increase was due to many businesses being shut down for a while in March," wrote Smith Leonard. "So we compared March 2021 to March 2019 and saw that orders were up 40 percent in that comparison. Our perception that business has really been good showed up in those results.
Shipments were up 34 percent. While still not up with orders, at least shipments seem to be catching up somewhat. Last month, shipments were up 18 percent over February last year. As orders once again exceeded shipments in dollars, backlogs continued to grow, increasing 6 percent over February 2021 and up 251 percent over March 2020.
Receivable levels continue to be in good shape.
"We think most are keeping current in order to stay on the list of “good” customers with a better chance of getting shipments. And as we have said before, the Paycheck Protection Program money has really helped many dealers with their cash flow. Inventories continue to climb as material purchases are improving and imported goods are coming back slowly.
"The employment situation is really difficult for most, especially where there are pockets of a number of manufacturers in the same area, such as the Piedmont of North Carolina and sections of Mississippi. Payrolls in March were 10 percent higher than March 2020 but again the effect of the pandemic last year skews the results."
Retail sales in April were about even with March but up substantially over April 2020 – up 51.2 percent. Sales at furniture and home furnishings stores were up 196.4 percent over April 2020 and up 45.3 percent year to date.
"To give an idea of how drastic some of the comparisons were, clothing and clothing accessory stores were up 726.8 percent from April 2020, as most were shut down in April."
"Total nonfarm payroll employment rose by a disappointing 266,000 in April leaving the unemployment rate at 6.1%. Gains were noted in leisure and hospitality, other services, and local government education.
Smith Leonard gives its thoughts:
"Our survey finally starts reflecting the lack of comparability to the prior year due to the pandemic. It will likely be some time before reasonable comparisons can be made again. But overall, orders have been really good for most in the industry. We did some comparisons of March 2021 to March 2019 and those results were very favorable."
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