Furniture sales and new orders see uptick in January
HIGH POINT – Sales for furniture and home furnishings stores in January were up 0.6% from December and 1.8% over January 2019. Meanwhile new orders for furniture rose in December by 4%, according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from accounting and consulting firm Smith Leonard.
Orders were down 8% in October and 5% in November, and for the full year orders were down 2%. That result was consistent among the 71% of participants who reported lower orders for all of 2019.
Shipments were up 2% in December with 52% of the participants reporting increased shipments for the month. For the year, shipments were just slightly ahead of 2018 but were down for 62% of the survey participants. Backlogs fell 4% from November as shipments in dollars exceeded new orders. Backlogs were 2% higher than December 2018.
“The 2% decline in orders for the year and a very slight increase in shipments, resulted in a rather weak year overall,” said Smith Leonard Partner Ken Smith in the survey report. “We read the Berkshire Hathaway annual report which stated that their home furnishings group revenues were down 1.3%. With that strong group of companies represented, it seemed to indicate that the weakness in the industry was felt at retail as well.”
Receivable levels remained in good shape, down 4% from December 2018 even with shipments up 2%. Inventories remain a bit high considering current order and shipment levels, but the increased levels have been declining for several months.
The Conference Board Leading Economic Index increased 0.8% in January following a 0.3% decline in December. The increase in January was driven by a drop in initial unemployment insurance claims, increasing housing permits, the outlook on the economy and financial indicators. The report suggested that the economy should continue to grow at about a 2% rate into early 2020, but it also mentioned the manufacturing sector may be impacted by the coronavirus.
“The coronavirus situation is not helping us start 2020 in a very positive way. All the concerns over travel, sourcing and general bad news will not be good if this epidemic isn’t slowed soon,” Smith added. “Consumer confidence has remained high, but that study was done before the news finally scared the stock market folks into realizing this is more than a virus, but a serious problem for business in getting materials, parts and labor. That includes even getting products shipped.”
Smith said that despite all of this, most of the economic news indicates that the economy should remain in a decent growth mode for most of 2020. You can click here for the full Furniture Insights report.
source: Furniture Today
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