From Home Furnishing Business
January Furniture Orders up 2 Percent
High Point accounting and consulting firm Smith Leonard conducts the monthly survey of performance among residential furniture manufacturers and distributors.
"New orders in January 2013 were 7 percent higher than January 2012 so at least the 2 percent increase was comparing to a decent growth month in 2013," said Smith Leonard Managing Partner Ken Smith in the report on the survey.
January shipments were up 3 percent compared with January 2013, but off 4 percent from December. As with orders, the January 2014 comparison was to a good month in 2013, when shipments were up 10 percent compared with the same month in 2012.
Backlogs rose 15 percent from January 2013 levels, up from a 14 percent increase reported last month and 1 percent over December.
"Backlogs have been up double digits since August 2013," Smith noted.
January receivables were 6 percent ahead of January 2013, compared with a 3 percent increase in shipments; and receivables were flat with December even though shipments were down 4 percent.
"Hopefully this is just a timing issue as receivables have continued to be in good shape over the last several months," Smith said.
Inventory levels rose 3 percent above January 2013 and 4 percent over December.
"The 3 percent increase over last year was the same increase we reported last month," Smith said. "We continue to believe that, based on current business, inventories are in good shape overall."
Factory and warehouse employment was 5 percent ahead of January 2013 and up 1 percent from December. Factory and warehouse payrolls were up 13 percent from January 2013, after rising 9 percent over all of 2013.
"While December payrolls were up only 6 percent, payrolls for several months prior to December were up double digits compared to the same month a year earlier," Smith said.
In summary, Smith noted that national news affecting the industry was, "for the most part, pretty much okay."
"Consumer confidence was up a bit, as were retail sales and leading indicators," he said. "The housing results were off a bit, but it is hard to continue double digit growth year over year, when supplies are low, mortgages are harder to get or get through the system, and weather has been a major drag on housing."
Weatherplayed a huge role in furniture sales in February and March.
"The weather has affected everything from suppliers to manufacturers and distributors, to shut down of plants and distribution facilities, to trucking operations, to retail stores having to close, to customers not able to get to stores, and even when goods were sold, some could not be delivered," he said. "For much of the country, spring has just not sprung.
"If there is such a thing as pent up demand in the industry, we certainly should have some now. But we still need housing to continue to improve. As we mentioned earlier, much of the economic news is favorable, at least to some degree. Inflation remains in check. Interest rates, though rising slightly, remain very favorable."