Furniture Insights: March Order Growth Slows

May 30, 2012  by in UnCategorized   

By Home Furnishings Business in economic news on May 31, 2012

New retailer orders for furniture slowed in March but remained positive according to the latest Furniture Insights survey of residential furniture vendors.

March orders were up 2 percent compared with March 2011, but increased just 1 percent from February according to the monthly survey conducted by High Point accounting and consulting firm Smith Leonard. March 2012 was gauged against a strong March last year, when orders were up 11 percent.

Year-to-date, new orders were up 8 percent over the first 3 months of 2011. Through March of 2011, orders were up 4 percent over the first 3 months of 2010.

Shipments rose 7 percent in March compared with the same month last year as a result of strong orders in the last several months. Shipments in March 2011 were also 7 percent higher than March 2010.

Year-to-date, shipments were up 11 percent over the first quarter of 2011 when they were 3 percent higher than the first quarter of 2010.

Shipments in dollars were slightly ahead of orders, so backlogs were basically flat with February. March backlogs were 18 percent higher compared with March 2011, down slightly from February levels.

March receivable were flat with both March 2011 and February 2012, in spite of
increased shipments in both comparisons.

"We have continued to be impressed with how receivables appear to be controlled," said Smith Leonard Managing Partner Ken Smith in the survey report. "This obviously is helping with cash flows."

Factory and warehouse employment rose 6 percent over March 2011 and stayed even with February, compared with a 6 percent increase for February over January--in line with orders and shipments up 8 percent and 11 percent, respectively.

Factory and warehouse payrolls rose 7 percent over March 2011 and 12 percent compared with February, since March has more days than February. Year-to-date payrolls were up 10 percent over the first quarter a year ago.

"New orders cooled a bit in March compared to double digit increases since September 2011,
when comparing the current month to the same month a year ago," Smith said in summary. "From much of what we had heard in March and at market, it seemed that many reported some softness in orders in late March and going into April.

"Much of the market talk was that retail had performed pretty well until late March and had cooled quite a bit in early April. Still retailers for the most part were not down in the dumps but instead seemed to be ok with business. It will be interesting to see how Memorial Day sales went."

Smith noted conflicting news about consumers: "The Conference Board reported a decline in consumer confidence with negative feelings toward employment and the economic outlook. On the other hand, the University of Michigan/Thompson Reuters report was totally opposite reporting the consumers were feeling good about job and economic outlooks.

"The really good news from the University of Michigan report was the 63 percent of those surveyed said that buying conditions for household durables was very good. Let€™s hope the Michigan survey was better than the Conference Board€™s, although Richard Curtin with the Michigan survey indicated that consumers may be a little too optimistic."