From Home Furnishing Business
February Furniture Orders Down 2 Percent
High Point accounting and consulting firm Smith Leonard conducts the monthly survey of residential furniture manufacturers and distributors.
New orders in February fell 2 percent compared with February 2013 and were about even with January.
"The 2 percent decline in orders in February offset the 2 percent increase reported in January resulting in the year-to-date results being flat compared to the same two months a year ago," Smith Leonard Managing Partner Ken Smith said in the report. "As we discussed last month, weather problems have been blamed for some of the drag on furniture sales through February and much of March."
Shipments also fell 2 percent in February versus February 2013 and were down 5 percent from January.
"Again we believe the bad weather across most of the country was to blame," Smith said. "Sales were slow at retail and shipping was also a problem with tractor trailers not able to move across many of the highways."
Year-to-date, shipments were up 1 percent for the first two months, down from a 3 percent increase reported last month.
Backlogs rose 6 percent over January as, in terms of dollars, new orders exceeded shipments. Backlogs were 14 percent higher than February 2013, down from 15 percent reported last month.
Receivable levels in February fell 7 percent from February 2013 and were down 5 percent from January this year. January 2014 levels were up 6 percent over January 2013.
"We expect these fluctuations are somewhat related to timing so we will watch over the next few months." Smith said. "The decline from January makes sense with shipments down about the same. But with shipments off only 2 percent from last February, the 7 percent decline seems a bit high."
Inventories were up 6 percent over February 2013, up from 3 percent reported last month.
"We think weather issues probably affected inventory levels as the slowness in orders was not really expected based on 2013 results," Smith said.
Factory and warehouse employment rose 5 percent above February 2013, the same as reported last month. Factory and warehouse payrolls were up 3 percent over February 2013 but down 5 percent from January--probably due mostly to fewer days.
In summary, Smith said there's good news and not so good news.
"On the good news front, consumer confidence continues to improve or remain positive (depending on which report you believe in) along with the leading economic indicators," he said. "Housing is somewhat steady now, as we seem to have reached a bit of a plateau, but these levels along with new home sales will help the industry.
"Of course, as all this good news comes, there comes these crazy increases in gas prices to help dampen consumer's confidence. On the other good news front, the April High Point Market seemed to be a very good one for most exhibitors. Retailers seemed ready to find good product as we even heard some order writing was up."