HIGH POINT, N.C. - New residential furniture orders were up 6% in July compared to the year prior, breaking a five-month downward trend, with 53% of survey participants reporting increased orders, according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from Smith Leonard.
Year-to-date new orders are down 2% for 67% of the participants.
The September 2019 Furniture Insights report also reports July shipments rose 1% compared to 2018 figures, but declined 12% from June. "That decrease is somewhat typical due to the July vacation week shutdown for most," said Ken Smith, managing partner at Smith Leonard. "Even with the overall increase, shipments were down for 56% of the participants."
Year to date shipments are relatively flat, the accounting and consulting firm reported. Last year shipments through July were up 3%. Backlogs were up 7% over June, and up 1% compared to July 2018.
Receivable levels were up 4% compared to July 2018, but down 2% from June. "Receivable levels were reasonable though a bit out of line, but we think that will probably get back in line in August as the vacation period can have some impact," Smith said.
July inventories rose 8% compared to last year's figures, and were up 2% compared to June. "Inventories remain a bit too high at an 8% increase over last year. But that increase continues to fall over the last few months, so it appears to be moving in the right direction," he added.
Sales at furniture and home furnishings stores were essentially even with both July and August 2018, according to the Furniture Insights report. Year to date, sales at stores were down 0.5%.
"After several months (five to be exact) of lower orders compared to the same month a year ago, the July results for orders created a good change of scenery," Smith said. "We have continued to use the term choppy as a description for business conditions and we continue to hear terms like that when talking to people. But as we noted in the report, while orders were up nicely compared to last year, orders were up for only 53% of the participants in the month. And orders were down 2% year to date with 67% of the participants reporting lower orders. So “choppy” may still be a good word."
He added, "The two Consumer Confidence reports, while different for the month, have definitely begun to show some declines in confidence over the last two months. Tariff and trade talks, possible inflation and, of course, the political news for presidential candidates, as well as anti and pro-Trump conversations, do not put most people in a great confidence mode."
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