HIGH POINT – New orders rose 23% for surveyed furniture manufacturers in June compared with last year, an increasing pace from May, which saw a 15% uptick.
While that seems positive, it’s not the whole story, according to Smith-Leonard, the accounting firm that compiled the survey numbers. In June 2022, new orders were down 39% from June 2021, indicating this month’s uptick might not be as rosy as it appears. In addition, year-to-date numbers look weaker, with orders so far this year down 8% compared with the same period last year. Some 71% of survey respondents said their sales were down year to date.
Shipments this month were down 28% compared with last June, when shipments were up 19% over June 2021. Year-to-date, shipments are down 17%, following a 7% increase in 2022 compared with 2021.
Backlogs for the month increased slightly, as the dollar amount of orders exceeded the dollar amount of shipments but were down 58% from last June. June 2022 backlogs were down 17% from June 2021.
Receivable levels were down 36% from June 2022, slightly lower than the 28% decline in shipments. Receivables were up 1% from May, in line with the 1% increase in shipments from May to June.
Inventories continued to fall, down 4% from May and down 26% from June of last year.
The number of factory and warehouse employees fell 1% from May and was down 9% compared with last year. Payrolls were down 17% from June 2022 and were down 9% year to date. Smith-Leonard expects payrolls to continue to decline.
“The folks in the industry, as a whole, will figure a way to work through the murky waters. Not all, as evidenced by some of the closings lately, but when it is all said and done, we are not sure that the failures were all indicative of a bad industry,” said Ken Smith, Smith-Leonard founding partner. “We do believe that we will get back to the typical industry ways of the more normal ups and a few downs. There probably will be more failures as there always have been, but people still need furniture.
“As we always say, you don’t have to sell all the furniture in the world. You just have to sell your share at margins you need. You just have to figure out what your share has to be.”