January Orders Rise 13%

April 1, 2012  by in UnCategorized   

By Home Furnishings Business in economic news on April 2, 2012

New furniture orders from retailers rose 13 percent in January compared with a year ago, according to the latest Furniture Insights survey.

January 2012 shipments also were up 8 percent compared with January 2011. High Point accounting and consulting firm Smith Leonard conducts the monthly poll of furniture manufacturers and distributors.

The improvement is significant, as January 2011 orders and shipments were down 1 percent and up 2 percent, respectively, compared with the same month in 2010.

While new orders fell 4 percent from December, that seasonal drop is normal. Shipments also fell 17 percent from December in January, but that also is fairly normal.

Despite January 2012's increase in shipments over last year, receivable levels were 8 percent lower than January 2011 levels but only 4 percent lower than December.

"We will see if this month's results were just a timing issue," noted Smith Leonard Managing Partner Ken Smith.

Inventories were up 4 percent over last January and increased 3 percent over December levels.

"With the increase in orders over the last few months, the increases in inventories appear to be in line and would be expected," Smith said.

Factory and warehouse payrolls rose 11 percent in January 2012 compared with the prior-year month, reflecting the increase in business. The 13 percent reduction from December is typical as December payrolls usually include year-end bonus and vacation pay.

The number of factory and warehouse employees was up 4 percent over last January so the increase in payrolls not only reflected more people, but appears to include more hours worked.

"The January results of our survey seemed to indicate that we are starting 2012 off in a very good way, with orders up 13 percent over last year," Smith said in summary. "Shipments were up 8 percent and backlogs were up 26 percent over last year. Each of these results were favorable considering that last year€™s January results were not too bad either.

"Overall, we continue to hear more and more positive comments from the people we talk with. Apparently premarket was well attended and most people we talked to were very pleased with the results."

Smith noted that consumer confidence appears to have not reacted too negatively to rising gas prices.

"It is clear that the economy is improving, though not as much as we would like," he said. "We hope that the continued increases in oil prices do not set us back. As we have said before, increase in oil prices affect so many things causing not only prices at the pump to go up, but also causing inflation for many other products, including many that go into making furniture."