Smith Leonard Furniture Insights Point to Backlogs to Weather the Storm

November 30, 2022  by HFBusiness Staff in Business Strategy, Industry   

Approximately 91% of participants reported lower new orders for September as well as year-to-date compared to last year. New orders were down 26% for the month versus September 2021 (September 2021 orders were down 20% from September 2020).

For the nine months ending September 2022, new orders were down 29% from 2021 (New orders were down 21% in the 2021 to 2020 comparison).

The fact that shipments continued to hold up due to the large backlogs that had built up is the good news. Shipments were up 5% over September 2021 with 71% reporting positive increases. Year-to-date shipments were up 6% compared to 2021 when they were up 30% over the first nine months of 2020.

Backlogs were down 40% from September 2021 and fell 6% from August. Yet the total backlogs remain, for many, at fairly high levels. This should help weather the storm of recessions for some time.

The Conference Board’s Consumer Confidence Index decreased again in November with both the indexes of the Present Situation and Expectations falling.

“Consumer confidence declined again in November, most likely prompted by the recent rise in gas prices,” said Lynn Franco, senior director of economic indicators at The Conference Board.

The Present Situation Index moderated further and continues to suggest the economy has lost momentum as the year winds down. Consumers’ expectations regarding the short-term outlook remained gloomy. Indeed, the Expectations Index is below a reading of 80, which suggests the likelihood of a recession remains elevated.

Overall, the report concluded that inflation is bothering the consumer at almost all levels, especially at the lower end and the uncertainty of the stock market is affecting the middle and upper middle.