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From Home Furnishing Business

Furniture Orders up Double Digits in Oct.

December 31, 2014  by in Economic News, Industry   

High Point accounting and consulting firm Smith Leonard compiles the monthly survey of residential furniture manufacturers and distributors. In October, new orders rose for around 59 percent of participants, dipping from just above 60 percent in September and August.

October's performance has new orders 6 percent ahead of last year at the same point. Around 72 percent of survey participants reported that orders are ahead of 2013 through October.

"October 2014 market dates were basically the same as last year so we would not expect market dates to have much of an impact," said Smith Leonard Managing Partner Ken Smith. "But, we did hear more order writing at this market than we have heard in some time, so market orders may have had some impact."
 
October shipments rose 7 percent from October 2013 levels, and were down slightly from September. Year-to-date, shipments remained 6 percent ahead of 2013's first 10 months.

Backlogs rose from September and were 9 percent above October 2013; up from a 3 percent increase reported for September.

October receivables were 4 percent ahead of October 2013, in line with the 7 percent increase in shipments over last year.

"The receivable increase was also very much in line with the 6 percent increase in year-to-date shipments," Smith said. "Overall, receivables continue to appear to be in good shape." 
  
Inventories were up 6 percent from October 2013, but about even with September.

"As with receivables, inventories have fallen back in line with current business conditions," Smith noted.
 
Factory and warehouse employment rose 1 percent from October 2013 levels, down from a 2 percent increase reported last month.

"It appears that employee hiring has leveled somewhat after posting solid gains since September 2013," Smith said.
 
Factory and warehouse payrolls were up 1 percent from last October, in line with the number of employees. Year-to-date, payrolls are 5 percent ahead of last year through October.

"Overall, we would say that business has been pretty good for most in 2014, and from what we have heard, business has remained at pretty good levels on up through November and December," Smith said in summary. "In fact, especially in the upholstery side of the industry, finding employees has become an issue, at both the higher and promotional end of the business.
 
"This last severe down turn, put a lot of furniture workers out of jobs. In addition, we did not attract many new folks, so it may be a while before we get built back up to handle current demands. Hopefully, this will not stretch out lead times to a point of disappointment for consumers."
 
Smith noted that most indicators affecting the furniture industry are looking good, including consumer confidence and GDP growth.

"Most of the current news for retail has been good," he said. "Interest rates and mortgage rates are extremely low. Gas prices are helping consumer confidence and pocket books.
 
"Housing results are bouncing around a bit from region to region, but generally speaking, housing is holding up nicely and really just needs to grow to keep up with current demands. So all in all, the furniture business should be reasonably good. Still, there are many demands for consumer dollars, so we continue to have to work hard to get our share."