January Furniture Orders Fall 1 %

March 30, 2011  by in UnCategorized   

By Home Furnishings Business in economic news on March 31, 2011

New orders from furniture retailers fell 1 percent in January 2011 compared with the same prior-year month, according to the latest Furniture Insights survey.

High Point accounting and consulting firm Smith Leonard conducts the monthly survey of residential furniture manufacturers and distributors.

New orders also fell 5 percent from December levels, but that's a normal month to month decline.

January shipments rose 2 percent over January 2010, when shipments were up 6 percent over January 2009.

Shipments fell compared to December, but again, that result is somewhat normal.

January backlogs increased slightly over December as the dollar volume of orders was greater than the value of shipments. Backlogs were down 6 percent from January 2010. In December, backlogs were 3 percent lower than December 2009.

Receivables remained in line with shipments, rising 1 percent over January 2010.

"Compared with December, January receivables were only down 1 percent, with shipments down 10 percent, but we believe most of that was timing as the December year end affects payments," Smith Leonard Managing Partner Ken Smith wrote in the survey report.
 
January inventories rose 1 percent from December levels, and were 12 percent higher than January 2010. In December, inventories were 22 percent higher than December 2009.

"Again some of this is timing and relates to some build up which occurred in the latter part of 2010," Smith noted.
 
Factory payrolls fell 1 percent from January 2010, while December payrolls were up 7 percent over December 2009. January payrolls were 19 percent lower than December, but drop reflects normal year-end bonuses and vacation pay.

Factory and warehouse employment fell 4 percent from January 2010, but actually increased 1 percent over December 2010.

"The results of our survey were pretty much in line with our expectations based on what we had been hearing," Smith said in summary. "We believe the weather, along with issues in the Middle East, have hampered sales of furniture in both January and February."

Smith said The Beige Book report from the Federal Reserve Districts issued in March was encouraging.

"It noted that overall economic activity continued to expand at a modest to moderate pace in January and February," he said. "Retail sales increased in all Districts, except Richmond and Atlanta, although Boston, New York, Philadelphia, Atlanta and Kansas City noted severe snowstorms had a negative impact on merchant activity.

"The retail report by the government was interesting in that most all categories of retailers were up over last year, except for the furniture and home furnishings stores and electronics and appliance stores. With auto and other motor vehicle dealers up 21.9 percent year-to-date, it appears that consumers are back in the car buying business and letting their homes wait a bit."

Smith said recent reports of business stabilizing and new store openings, or the reopening of closed stores, are encouraging.