From Home Furnishing Business
Furniture Factory Orders Tumble 10% in September
Furniture factory orders tumbled 10% in September, the first monthly decline in more than a year, according to the latest monthly survey from the Smith Leonard accounting and consulting firm.
The decline followed a 1% increase in August, indicating a marked slowdown in business in the third quarter. July orders, for example, were 11% ahead of July 2016, while June orders jumped 6%, Smith Leonard said.
The firm noted the September decline may have been exacerbated by a strong September 2016, when orders were 14% ahead of September 2015. Orders in September 2017 were 3% above September 2015, the firm said.
“For sure, 3% growth in two years is not all that exciting,” Smith Leonard Partner Ken Smith said in his monthly Furniture Insights newsletter. “That growth followed a 1% increase reported in August. So, clearly, things slowed late in the third quarter.”
For the first nine months of 2017, factory orders were 4% ahead of the same period in 2016.
For September, shipments were 4% ahead of September 2016, but backlogs were 2% below the comparable month.
“The results from September were somewhat expected as our recent conversations, including our (High Point) Market visits, had indicated that business had softened,” Smith wrote. “In addition, hurricanes impacted business and even slowed some Market traffic. We would expect to see some pick-up over the next few months as those affected in Texas and Florida and other areas begin to try to recover and rebuild.”
He noted that consumer confidence is at its highest level in years, while unemployment and interest rates remain low – all of which should be positive signs for the furniture industry.