Smith Leonard Releases April Insight Report

May 5, 2024  by HFBusiness Staff in Business Strategy, Industry   

Shipments in February 2024 were down (5)% from February 2023, but up 8% from January 2024. February 2024 backlogs were down (24)% compared to February 2023, but flat compared to January 2024.

Receivable levels were up 1% from January 2024, but down (7)% from February 2023, which is materially in line with the decline in shipments for same period. Inventories and employee levels are again materially in line with recent months, but down from February 2023, indicating that companies have substantially adjusted levels to match current operations.

The Conference Board Consumer Confidence Index® deteriorated for the third consecutive month in April, retreating to 97.0 (1985=100) from a downwardly revised 103.1 in March. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—declined to 142.9 (1985=100) in April from a downwardly revised 146.8 in March.

Meanwhile, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 66.4 (1985=100) from a slightly upwardly revised 74.0 last month. An Expectations Index reading below 80 often signals a forthcoming recession.

Expectations that stock prices will increase over the year ahead declined slightly, after rising every month since November of last year. Meanwhile, the share of consumers expecting higher interest rates over the year ahead rose again, to 53.8% in April. On a six-month basis, buying plans for homes and big-ticket appliances, which are interest-rate sensitive, continued to soften. Vacation plans also decreased to the lowest level since June 2023, with planned trips both within the US and abroad declining.

Real gross domestic product (GDP) increased at an annual rate of 1.6% in the first quarter of 2024, according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2023, real GDP increased 3.4%.

The increase in real GDP primarily reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

Sales at furniture and home furnishings stores were down 0.3% in March 2024 from February 2024 on a seasonally-adjusted basis, and down 6.1% from March 2023.

Assurance Partner of Smith & Leonard Mark Laferriere, “We enjoyed attending the High Point Furniture Market in April and seeing so many old friends, great product, and new showrooms. Similar to the mixed results from our monthly stats, discussions of current business conditions, as well as expectations for the rest of 2024, were across the spectrum. However, a shared concern we heard repeatedly was about the continued lack of traffic in retail stores.”

To see a complete copy of the report, visit the website.