Daily News
From Home Furnishing Business
Smith Leonard January 2023 Outlook Paints a Cloudy Picture
January 31,
2023 by HFBusiness Staff in Business Strategy, Industry 
Smith Leonard released their latest survey of residential furniture manufacturers and distributors, and once again, the results “were not very pretty, yet somewhat in line with expectations.”
For the month of November 2022, net new orders were off 35% compared to November 2021, in line with recent results for much of the year. But most of the recent comparisons have been to prior year results that were not that strong compared to 2020 results.
When 97% of the participants report a decline in orders for the month, we think it’s safe to say that business is definitely off. Year to date, orders were down 34%, off for 94% of the participants.
We are continuing to hear from more that backlogs are getting to a point where long lead times are gone for many. This will eventually become an issue for many if new orders continue to slide, as shipments will begin to slow down.
Receivable and employee levels continue to appear to be in good shape. However, overall inventories are too high, and coupled with retail inventories being too high; it will take some time to bring them down to more reasonable levels.
“Consumer confidence declined in January, but it remains above the level seen last July, lowest in 2022,” said Ataman Ozyildirim, senior director, Economics at The Conference Board. “Consumer confidence fell the most for households earning less than $15,000 and for households aged under 35.”
The Expectations Index retreated in January reflecting their concerns about the economy over the next six months. Consumers were less upbeat about the short-term outlook for jobs.
Consumers’ expectations for inflation ticked up slightly from 6.6% to 6.8% over the next 12 months, but inflation expectations are still down from its peak of 7.9% last seen in June.
The current survey results continue to be difficult to make complete sense of since so many individual companies are in different places themselves. That, along with the other variables we have discussed before, continues to make “reading the tea leaves” hard to do.
In the meantime, we continue to suggest that plans be made for several what-if scenarios so that as they play out whichever way, you have somewhat of a plan in place to deal with whatever comes your way.