HIGH POINT, N.C. - Residential furniture orders rose 9% in August compared to the year prior, marking an eight-month streak of year-over-year growth, according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from Smith Leonard.
The October 2018 Furniture Insights report also shows year-to-date orders up 6% compared to last year. "August 2017 year to date orders were also 6% ahead of the same 2016 period, so the comparisons are to pretty good numbers," said Ken Smith, managing partner at Smith Leonard.
Approximately 71% of the participants reported increased year to date orders.
Shipments were also up for the year-over-year comparison, showing a 5% gain in August compared to 2017 figures, and up 3% for the year.
Backlogs fell 4% compared to July figures, but were up 6% compared to August 2017, Smith Leonard reported. Receivable levels were up 7% over last year's number, "but that was not too far out of line with the 5% increase in shipments," the report said. Inventories were flat with July and up 4% from August 2017. "So overall, pretty much in line with current conditions."
"The results have shown relatively steady growth throughout the last several months. While some conversations have discussed how business has slowed somewhat in the later part of the summer, the results of the survey have not shown that. It was also nice to see that such a large percentage of our participants enjoyed some nice increases," Smith said.
September sales at furniture and home furnishings stores were up 1.1% over August on an adjusted basis, and up 4.3% compared to September 2017, with year-to-date retail sales up 4.6% for the first nine months.
At the recent High Point Furniture Market, "much of the conversation at market related to the weather and tariffs," Smith said. "The consensus of the folks we talked to, seem to believe that the 10% would definitely stick at least in the near-term. And that the 25% tariff would probably come into effect at the first of the year."
For the most part, Smith added, "the industry finds a way to figure out how to deal with these kinds of issues. Most people we talk to privately agree that the industry could use some inflation in prices to begin with. We have said that for a long time. Unfortunately, we were not thinking caused by tariffs, but instead with better profits.
"Hopefully, those in the path of both recent storms will be able to recover soon."
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