Furniture Insights: August Orders Up 9%

October 30, 2011  by in UnCategorized   

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

Furniture retailers ordered 9 percent more furniture in August than the same month last year, according to the latest Furniture Insights survey.

That's on top of a 6 percent increase over July orders, and compared with a 1 percent increase in August 2010 orders over August 2009. Each month, the High Point accounting and consulting firm Smith Leonard conducts the survey of residential furniture manufacturers and distributors.

Year-to-date, new orders are up 5.5 percent over last year. At this time last year, new orders were up 8 percent over 2009.

"We continue to believe that the results for July and August were partially reflective of some price increases," noted Smith Leonard Managing Partner Ken Smith.
 
August 2011 furniture shipments rose 3 percent from August 2010 and were 18 percent higher than July, a normal July-August rise due to the Fourth of July holiday.

Year-to-date, shipments were 3 percent ahead of 2010 results when they were 9 percent ahead of the same period in 2009. Approximately 60 percent of the participants have reported increased shipments year-to-date with several participants only down a few points from last year.

With shipments slightly exceeding orders, backlogs fell 2 percent from July but were a healthy 8 percent higher than last year at this time.
 
August receivables fell 3 percent from August 2010 despite 3 percent increase in shipments.

"Receivables were 5 percent higher than July compared to an 18 percent increase in shipments, but we believe this may have been a timing issue," Smith said.

Inventories rose 2 percent over August 2010, down from a 5 percent increase reported last month. Inventories were up 2 percent over July 2011 levels.

"Considering the effects of direct shipments, the increase in inventories seems to be in line with current business conditions, at least on an overall basis," Smith said.
 
Factory and warehouse employment was unchanged from July and fell 1 percent from August 2010 levels.

"While these do not show much change, there are several that are significantly up in employees while others are down more significantly," Smith said. "Most of the increases were with pure manufacturers."

Factory and warehouse payrolls rose 6 percent from last August and is up 2 percent year-to-date.

"Based on some reports we had heard, the August results for new orders were better than we expected," Smith said in summary. "The 9 percent increase in orders puts the participants up to a 5.5 percent increase for the year compared to an 8 percent increase at this time last year. Shipments also continue to improve with a 3 percent increase showing for year-to-date up from a 9 percent increase at this time last year.

"As has been the case, participation in the growth has not been across the board as there are participants that are up very nicely versus some who continue to show sharp declines, some well into double digits."

Smith also reported positive results from October High Point Furniture Market.

"Our take was that expectations were not all that high, but we seemed to have exceeded them in most cases. As one market person described it, if you base it on a good, better or best market, his results would be in the better category," he said. "Others said the market was one of the best in some years. We have lived for the last several markets with some orders and lots of commitments. This market we heard more actual order writing than we have heard in some time. We think that added to the "mood" of market."

Smith said the jury's still out on October market attendance.

"Many said attendance was off, but several said theirs was up and up nicely," he said. "The Market Authority said bus ridership and international attendance was up significantly along with housing booked through the Authority. Some of the downtown parking lots were full for several days, the first time in some years. We will have to wait to see what information is reported by the buildings owners.

"Overall though, we would have to say the market was very positive. Maybe not like the old days, but we are not sure the "old" days will ever come again as they were."