HIGH POINT – Residential furniture orders climbed 7% in February over the same time last year, according to accounting firm Smith Leonard in its latest report. Orders have now risen in eight of the past nine months, only declining in January. Two-thirds of survey participants reported increased orders. New orders were also up 5% month-over-month from January.
Shipments in February were down 5% from last year but up 8% from January. Backlogs were down 24% compared with February 2023, but flat compared with January 2024. Receivables were down 7% from last year but up 1% over January.
Inventories and employee levels were again materially in line with recent months, but down from February 2023, indicating that companies have substantially adjusted levels to match current operations. The number of factory and warehouse workers fell 7% from last year, and payroll expenses fell 2%.
“We enjoyed attending the High Point Market in April and seeing so many old friends, great product and new showrooms,” said Mark Laferriere, Smith Leonard assurance partner. “Similar to the mixed results from our monthly stats, discussions of current business conditions, as well as expectations for the rest of 2024, were across the spectrum. However, a shared concern we heard repeatedly was about the continued lack of traffic in retail stores.
“Nationally, consumer confidence remains shaky, with consumers relatively positive about their present situations, but growing more anxious about prospects for future business conditions and jobs, among other things,” he said. “With waning consumer sentiment combined with stagnant GDP and housing, inflation refusing to budge, continued political and international concerns, and rate cuts slow to materialize from the Fed (as announced this week), things will presumably continue to be challenging for the industry for the duration of 2024. Perhaps some of those who have been on the sidelines of the housing market will drive some further activity despite the interest rate environment.
“However, there are a few bright spots including national employment remaining steady. And while furniture orders certainly are not where we want them to be, they do remain above comparable periods of 2023, which along with manageable supply chains and inflation at least provides companies some continuity with which to manage their businesses, control what they can control, and pursue opportunities as they present themselves.”