Residential furniture orders, shipments gain in July
Ethan Allen upholstered furniture
Ethan Allen upholstered furniture.

Smith Leonard reports that its recent survey of residential furniture manufacturers and distributors continued the last few months of positive news. New orders in July were up 11 percent over July 2016, following increases of 6 percent in June, 8 percent in May and 7 percent in April. New orders increased over last year for 67 percent of survey participants.

Year-to-date, new orders were 7 percent higher than the same period a year ago, up from 6 percent reported last month. Approximately 72 percent of the participants have reported increased orders for the year.

Shipments were also up 10 percent over July 2016. The decline of 20 percent from June is normal with most of the companies taking a week off for the July 4th holiday. Increased shipments for the month were reported by 70 percent of the participants.

Year-to-date, shipments were up 5 percent. Approximately 70 percent of the participants reported increased shipments year-to-date.

Also, the number of factory and warehouse employees and payrolls appear very much in line, though the number of factory employees were actually down 3 percent from last year. This could be a timing issue. Year-to-date, payrolls are up only 2 percent over last year in spite of the increased levels of orders and shipments.

Meanwhile, existing-home sales fell slightly in August from July but were still slightly ahead of August 2016. But this was the lowest increase over the prior year in 2017. Single-family sales were also down from July but still up 1.7 percent over August 2016.

Existing-home sales continued to be hampered by lack of inventories and increasing prices. Also, some of the decline could be the effects of Hurricane Harvey in Texas.

New house sales were also down from July and down 1.2 percent from August 2016. Sales were down in the South but up in all three of the other regions. Single-family starts were up 17.1 percent with starts up in three regions but fell in the Midwest. Multifamily starts were off substantially causing overall starts to only be up 1.7 percent.

Sales at furniture and home furnishings stores in August were up 5.4 percent over August 2016. Year-to-date, sales at these stores were up 4.0 percent, the third highest growth of all categories other than nonstore retailers.

The employment gains in August were a little softer at 156,000 but were still decent. The unemployment rate held steady at 4.4 percent and the number of unemployed held at about 7.1 million.

The third estimate for GDP indicated a 3.1 percent increase. The increase was led by positive contributions from Personal Consumption Expenditures, nonresidential fixed investment, exports, federal government spending and private inventory investment.

Smith Leonard reported that the solid growth in new orders since March continues to be good for many in the industry. With growth in orders year-to-date at 7 percent and increased orders for over 70 percent of the participants, things seem pretty good through July. Unfortunately, especially for those in the path of Hurricanes Harvey and Irma, things will definitely be choppy for a while. The recovery periods have definitely slowed business in Florida and Texas as well as lingering effects of major rains from Harvey. But as things settle down in all the hurricane impacted areas, we should see significant new orders.

In addition, in spite of those impacts, we continue to believe business will be pretty good throughout the rest of the year. The big question in the near future seems to be when the stock market bear wakes up and how long he/she will stay up as well as how bad a mood it might be in.



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About the author
Karl Forth

Karl D. Forth is online editor for CCI Media. He also writes news and feature stories in FDMC Magazine, in addition to newsletters and custom publishing projects. He is also involved in event organization, and compiles the annual FDM 300 list of industry leaders. He can be reached at [email protected].