Furniture Orders Rise Again in February

April 29, 2012  by in UnCategorized   

By Home Furnishings Business in economic news on April 30, 2012

New retailer orders for furniture rose 11 percent in February compared with February 2011, 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.

Year-to-date, new orders are up 12 percent following January€™s 13 percent increase. February marked the sixth consecutive month with double digit increases in orders.

February 2012 shipments rose 17 percent over the same month last year, when they were down slightly from 2010. Year-to-date shipments are up 13 percent over the first two months of last year.

"A very strong 92 percent of the participants reported increased shipments over February a year ago," said Smith Leonard Managing Partner Ken Smith in the survey report. "It has been a long time since we have seen that high a percentage."

With orders, in dollars, exceeding shipments, backlogs increased again, up 6 percent from January and up 20 percent from last year.

"With that in mind, we expect that March shipments will be higher when we report next month," Smith said.

February receivable levels remained level with January despite increased shipments, and increased only 5 percent over January.

Inventories fell 6 percent from January, in line with the increase in shipments. Inventories were up 1 percent from February 2010 levels.

"As with receivables, inventory levels remain in very good shape from our perspective," Smith noted.

Factory and warehouse employment rose 6 percent over last February, up from January 2012's 4 percent increase; and the number of employees increased 1 percent in February over January.

Payrolls were up 13 percent over last February, which appears to mean more people were working more hours. Year-todate, payrolls were up 12 percent, in line with the increase in orders and sales.

"February results of our survey continued the streak of good news," Smith said in summary. In addition to the sixth consecutive month that orders were up double digits, February orders also marked the 11th out of the last 12 months that orders exceeded the prior year comparison. (May of 2012 was flat with May of 2011.)

"From what we have heard, we expect March results to be favorable as well," Smith said. "We just finished what we perceived to be a very good High Point Market. Most everyone we talked to said attendance was up, and the streets and parking lots and buses seemed to prove that. We also heard that room occupancy at the local hotels was the best in some time with reports of more people finding rooms in our sister cities."

The only negative news Smith heard was that retail activity slowed in April, perhaps due to the early Easter holiday, better weather earlier in the year and spring breaks.

"While we have had a streak of good results, these numbers are just making a good dent in all that was lost since 2007," Smith noted. "For the first two months of 2012, orders were down in dollars still some 15 percent from the first two months of 2006 (price increases not considered). But the good news is that we do appear to be recovering.

"The consumers also appear to be coming back after this long recession. We do not expect to gain it all back at once, but we are at least seeing some really positive results for an extended period. Let€™s hope the enthusiasm from Market continues."