HIGH POINT, N.C. - New residential furniture orders dropped 5% in February compared to the year prior, with just 37% of survey participants reporting increased orders for the month, according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from Smith Leonard.
Year-to-date new orders are up 1%, with 44% of the participants having reported increased orders for the two months. Last year, orders for the first two months were up 4% over 2017 figures.
The April 2019 Furniture Insights report also reports February shipments fell 3% compared to 2018 figures, and were 14% below January, "but part of that was due to two fewer shipping days in February versus January," said Ken Smith, managing partner at Smith Leonard. Almost 60% of the survey participants reported lower shipments in February 2019 compared to a year ago.
Year to date, shipments are up 5% following a strong — 14% increase — in January. About half the participants reported year-to-date shipment increases. Backlogs dropped from the 9% increase reported in January, to 7%, the accounting and consulting firm reported.
Receivable levels were 5% higher than February 2018, but down 9% from January. "Shipments were down 14% from January so the 9% decline was reasonable," Smith said. "Receivable levels remained in line with year to date shipments although, with the decrease in shipments for the month, we might have thought they would go down some. We will watch next month."
Although February inventories showed a 5% increase compared to last year's figures, there was a 3% drop compared to January. "With the slowdown in business talked about, this decrease made sense," noted Smith.
"In spite of a very good market from a feel-good standpoint, orders have not picked up that much since Market, according to informal talks with clients and others," Smith said. "In fact, a few mentioned words like 'very slow' or 'worse.'"
He added, "A couple of people we talked to indicated that they had noticed some improvement recently. I also spoke with a multi-bag sales guy yesterday morning who said his recent road trip was very good and business seemed to have picked up at the retailers he called on just last week."
March sales at furniture and home furnishings stores, on an adjusted basis, were up 1.7% over February and 1.1% over March 2018. On a non-adjusted basis, sales were down 1%, according to the Furniture Insights report. Year to date, sales at these stores were down 0.9%.
"Consumer confidence remains at very good levels, according to the surveys. And the stock market has continued to perform. Housing though continues to be held back some due to higher prices. So overall, most people we talk to do not understand why the furniture business is not better than it is," Smith said.
"We know that weather in many parts of the country has been pretty bad. That along with all the negative news on TV is keeping people from spending on furniture products, at least the larger ticket items," he added. "Hopefully as it appears spring has finally sprung in some parts, consumers will feel better about their spending."
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