New furniture orders dip in January, breaking 8-month rise

HIGH POINT – Residential furniture orders in January dipped 1% by the dollar from last year, according to accounting firm Smith Leonard, which surveys furniture manufacturers and retailers every month in its Furniture Insights report. This breaks the streak of eight months of increases. New orders increased month-over-month from Dec. 2023 however, rising 7%.

Shipments in January were down 13% from last year, consistent with the 14% decline seen in December. Like with new orders though, shipments rose month-over-month from December, climbing 2%. January backlogs were down 1% from December and down 27% from last January.

Shipments in January were down for approximately three-fourths of the participants compared to Jan. 2023.

“So despite recent improvement in new orders overall, trends continue to be affected by many companies shipping from their historically high backlogs through much of 2022 into early 2023,” said Mark Laferriere, assurance partner at Smith Leonard.

Receivable levels were up 6% from December 2023, which Smith Leonard attributed to timing around the holidays. However, receivables were down 12% from January 2023, which is materially in line with the decline in shipments.

Inventories and employee levels are again in line with recent months, but down from January 2023, “indicating that companies have substantially adjusted levels to match current operations.”

Laferriere gave his overall thoughts:

“Consumer sentiment related to the current economic environment remained largely unchanged from the prior month. And despite diminishing concerns about inflation and the likelihood of a widespread recession, the general outlook for the remainder of the year has deteriorated due to concerns about future business conditions, jobs, and the political environment, among other things. Some of these negative sentiments seem to be playing into what we’re seeing with new order trends in our monthly year-over-year stats recently.

“But at the same time, the housing market continues to show signs of life despite the elevated interest rate environment. Perhaps buyers have finally accepted this new normal and gotten on with life. Hopefully this activity, along with the expected interest rate cuts from the Fed in the second half of the year, will spur additional housing and furniture sales.”

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