HIGH POINT - New orders for residential furniture increased in August compared to the same period last year at 72% of furniture manufacturers and retailers surveyed, according to accounting firm Smith Leonard. It also increased in dollar terms, rising to $2.6 billion from last year's $2.03 billion.
However, as has been the case over the past few months, these numbers may not accurately represent the situation. Orders in August 2022 were down 34% compared to August 2021, and the number of orders in 2021 was down 14% compared to 2020.
Since the beginning of the year, dollar orders have been roughly the same as the same time last year, but are increasing at about 40% of survey participants. From the beginning of the year in August last year to the present, orders have decreased by about 29% from 2021.
Compared to 2021, August shipments increased by 6% in 2022 from the beginning of the year, then decreased by 17% from August 2022 and decreased by 18% from the beginning of the year. According to Mr. Smith-Lenard, shipping performance is also confused due to the backlog of shipments. Then, as orders began to decline, we were able to maintain delivery by shipping large sales order backlogs.
The backlog has decreased again, down 51% since August 2022. It appears that most companies are now returning their backlogs to more normal levels.
Sales and inventory levels also matched, with inventory down 32%. Factory and warehouse wages continued to decline in August. Ken Smith, founding partner of Smith Leonard, said, “Overall, the residential furniture business is probably in a slump at best.” “And there seem to be many reasons. The economy as a whole appeared to be growing at a strong pace in the third quarter, but some of these measures don't reflect the views or behavior of consumers. Yes, they are continuing to spend, but the cost of living rise is having an impact on household spending - there isn't enough money left over to pay for your brother's purchases.
“Leading economic indicators have been falling for more than a year and a half. If the unexpected facts are true, the business housing sector is likely to face further turmoil as many say certain, if not most, sectors are in crisis. By 2023, we may already be in a bit of a recession.
Meanwhile, many participants gathered at the High Point Market in October, and I thought the 'atmosphere' of the market was very good. There were great new products on display. Many people bought into the idea that participants loved our products and were very satisfied with our displays, but the only problem was that “they probably forgot their pens”. But those amazing products will ultimately sell when consumers return to stores and designers. I suggest having a few new products on hand. Some people come and live there. We hope this “slowdown” will end soon. However, I think we probably need to be prepared to overcome this situation a little longer than many people think. "
