April Furniture Orders Up 16%

June 29, 2011  by in UnCategorized   

By Home Furnishings Business in economic news on June 30, 2011

An early High Point Furniture Market helped boost April furniture orders from retailers 16 percent over April 2010, according to the latest Furniture Insights.

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

"As we expected, the results for April to April comparisons were quite different due to the significant difference in High Point market dates," said Smith Leonard Managing Partner Ken Smith. "The April 2010 market dates were April 17 through the 22nd while April 2011 dates were the 2nd through the 7th. The dates allowed more market and after market orders to be recorded in April 2011 versus April 2010."

Smith noted that since March 2011 orders were 11 percent higher than March 2010, the April increase may not have been all market related. Orders through April are 7 percent ahead of 2011's first four months, when new orders were up 10 percent compared with the same point the previous year.

Shipments, generally not affected as much by markets specifically, rose 2 percent over April 2010. Year-to-date, shipments are up 3 percent over last year when they were up 5 percent over 2009. Backlogs rose 8 percent over March and were 6 percent higher than April 2010. Backlogs were 5 percent higher than February in March 2011.
 
Receivables rose 6 percent in April, compared with the 2 percent increase in shipments and the 3 percent year-to-date increase in shipments: "Hopefully, this is just a timing issue so we will see how it looks next month," Smith noted.

Inventories increased 14 percent in April over prior-year levels, when they were down 13 percent from April 2009. Inventories fell 1 percent from March. March 2011 inventories were up 16 percent over March 2010.

"If we recall correctly, last year inventories were probably a bit low when orders started picking up, so the increase in inventories may not be that far out of line," Smith said.
 
Factory and warehouse employment stayed even with March 2011 but fell 2 percent compared with April 2010. March 2011 employment also fell 2 percent from March 2010.

"The results for April among most of our participants were good even considering the effects of market timing," Smith wrote in summary. "Hopefully we will see those orders shipped in May and June as we need to turn orders to cash. Recent conversations have been somewhat mixed regarding current business conditions. For the most part, it seems that business is not really good but not really bad either. Certainly weather has had a significant impact on furniture shopping in many areas of the country. From the winter snows to the spring time flooding and tornados, there has clearly been a negative impact on consumers, even those who would be willing to spend.

He added that high gas prices, a slow economy, weather and a looming presidential election are putting a drag on the consumer confidence necessary for consistently strong furniture sales.

"On the good side, gas prices seemed to be heading down, with projections of lower prices," Smith said. "While the employment picture is not great, it seems to have stabilized. If we can keep the stock market at least at current levels--at least for those who stayed in most of the decline we saw in 2008 and 2009 has recovered--that will also help consumers.

"We have a good ways to go until the industry is consistently improving. On a good note, we just finished our annual survey of operating statistics and overall we saw improvements in profitability. Certainly not back to historical levels or even levels that are needed, but at least the results were positive. It appears that many companies have adjusted to current volume levels which hopefully will continue to improve even with modest growth."