From Home Furnishing Business
New Furniture Orders up 6% in May
High Point accounting and consulting firm Smith Leonard conducts the monthly poll of residential furniture manufacturers and distributors.
"May 2012 new orders were 10 percent higher than May 2011, so the May results were good considering they were compared to a good previous period," said Smith Leonard Managing Partner Ken Smith in the survey report. "Orders were up for 68 percent of the participants, down from 80 percent reported last month."
Through May, 2013 new orders were 4 percent higher than last year's first five months; up from 3 percent reported last month. Approximately two-thirds of the participants have reported increased orders so far this year, down slightly from 71 percent last month.
May shipments rose 3 percent over May 2012; and 9 percent over April 2013. Only 53 percent of survey participants reported increased shipments. Year-to-date shipments were up 2 percent over the same point a year ago. With orders exceeding shipments, backlogs were 8 percent more than May 2012, up from a 6 percent increase reported last month.
May receivable levels were about even with May 2012 but rose 6 percent from April levels.
"With shipments up 3 percent from last year and 9 percent from April, the receivable results were very much in line," Smith said. "In fact, receivable levels continue to look very good overall."
Inventories rose 1 percent over April, and also were 1 percent higher than May 2012, in line with current business conditions.
Factory and warehouse payrolls rose 8 percent over May 2012. Smith said that "was a little surprising considering the level of shipments, but with orders up, there could be some timing issues."
Factory and warehouse employment was even with April but up 3 percent over last May, up from a 2 percent increase reported last month.
"Year-to-date, payrolls are only up 3 percent so overall, it seems that the employee indicators are very much in line," Smith said.
In summary, Smith noted that while the last couple of month's results of the survey have been pretty good, "from what we hear on the street, no one seems overly excited. We continue to hear the same stories. Business is good for a few days or even a couple of weeks, and then it falls off again. There just doesn't seem to be consistency or as we call it, a lack of traction.
"We asked someone recently how business was and he reminded me of something we told him that we heard several markets ago. The exhibitor said, when I asked how market was going, something like, well we used to count orders, then we quit writing as many orders, then we counted people but the dealers brought less people. So we counted dealers. Then some dealers quit coming. But this market, our compliments are up 25 percent. It seems we have repeated the same story about business conditions for several months now, but it really does seem to describe what is happening."
He added that while two consumer confidence reports "were not quite in sync, consumer confidence is improving." Housing also keeps improving, interest rates--though rising a bit--remain low, and the stock market's performing well of late.
"One of the main negatives lately is gas prices jumping around for no seemingly apparent reason," Smith said. "The employment picture, while improving, continues to make people a bit nervous. But in general, the whole economy is just shuffling along and the industry seems to be shuffling along with it.
"At least we can continue to say we are improving, as slow as it seems. We guess we just dug a deep hole and inching our way out seems so slow compared to how fast the hole was dug."