Daily News
From Home Furnishing Business
Smith Leonard’s May Insights Indicate Things Are Looking Down
May 31,
2023 by HFBusiness Staff in Business Strategy, Industry 
According to the May 2023 Furniture Insights Executive Summary, new orders in March 2023 fell 14% from March 2022 levels according to our latest survey of furniture manufacturers and distributors, continuing the monthly declines from the previous year.
New orders were down for 71% of the participants. Year-to-date, new orders were down 18% compared to the first quarter of 2022. Year-to-date orders were down for 78% of the participants.
Shipments were down 16% from last March and down 19% year to date. For the month, shipments were down 61% and down year-to-date for 56% of the participants. Several participants are continuing to ship from healthy backlogs while others have brought backlogs down to more normal levels and are shipping from current order rates, reversing the trends we had seen when orders were down, but shipments were up.
The Consumer Confidence Index declined in May as both the Present Situation Index and the Expectations Index fell. The Expectations Index was below 80 again, the level that is associated with a recession within the year.
The report noted that May’s decline reflected a particularly worsening in the outlook among consumers over 55 years of age. Plans to purchase homes in the next six months held steady but the report noted that plans to purchase autos and big-ticket appliances ticked up compared to April. Hopefully, that includes furniture.
Current words to describe business are “slow” or “soft” or various other adjectives, none of which are very exciting. Many in the economic world, including quotes in this newsletter, say we are either in a recession or heading for one. Many in the industry will say we are right now.
Large backlogs have kept many recording nice sales levels, but as new orders continue to be less than shipments, sales levels will soon decline as many have already seen.
The overall economy is definitely slower. The GDP for the quarter reflected that and the economic news seems to say recession is near, though many would say it is already here, especially at the lower end.
We hope Memorial Day sales can stimulate some business at retail, but we all know that summertime generally is not the strongest period for furniture business for all the obvious reasons. As employment levels remain strong, we hope the recession, if it is coming or has already, is one that is short-lived and not very deep or “mild” as some have described.