From Home Furnishing Business
Furniture Insights: Factory Orders Tumble 37 Percent in July
New factory orders for residential furniture tumbled 37 percent in July -- compared with July 2021 – as the industry continued to experience a significant slowdown in business. The data, included in the monthly Furniture Insights newsletter from the accounting and consulting firm Smith Leonard, also showed that July 2021 orders were 11 percent below July 2020. However, July 2020 new orders were up 39 percent over July 2019.
New orders for the first seven months of 2022 were down 29 percent from the same period in 2021, but the first seven months of 2021 represented a 39 percent increase over the same period in 2020.
Ken Smith, a Smith Leonard partner and longtime author of the newsletter, said comparisons with previous years are difficult, at best, because of the wild swings in business and the massive supply chain problems that resulted from the pandemic.
“When 2022 is compared to 2021, it is clear business has not only slowed as we expected after the fantastic growth we had in 2020 and 2021 but also the slowdown in the economy as a whole has clearly affected the levels of business today,” Smith wrote in Furniture Insights. “Add to that confusion, and realize that price increases during 2020 and 2021 and even some in 2022, make comparisons difficult, to say the least.”
He noted that factory backlogs continue to decline as shipments are exceeding new orders, but Smith said he’s still concerned about high wholesale and retail inventory levels. He said he hopes that recent discounting is limited to excess inventories and won’t lead to a general reduction in furniture prices.
“Obviously, we are in some turbulent times. Are we in a recession for the whole economy? While some indicators continue to say we are not, it sure is beginning to feel like we are,” Smith wrote.
Smith said only 12 percent of the companies participating in the Furniture Insights survey reported an increase in orders in July. In addition, only 9 percent reported an increase year-to-date.