Smith Leonard PLLC Reports June Furniture Insights

July 7, 2024  by HFBusiness Staff in Business Strategy, Industry   

In his executive summary, Laferrier stated, “Overall, there were minimal changes in the economic indicators we track during April/May 2024 compared to recent months. However, our monthly stats and national data shows the furniture industry continuing to hold its own in the face of headwinds from consumer confidence, housing, interest rates, and inflation.”

“Meanwhile, ocean container rates are again on the rise with TD Cowen reporting a 94% increase in spot rates between March 28 and June 27, though this is expected to ease in the second half of the year. This has led some within the industry to reestablish surcharges on internationally sourced goods.”

Laferrier continued, “On a more positive note, in their June 2024 meeting, the Fed indicated the possibility for one 0.25% cut by the end of the year, with the potential for up to four additional 0.25% cuts in 2025 if inflation continues to ease.”

He concluded, “Hopefully, the increased new orders we’ve seen in our monthly stats for the first four months of 2024 will drive strong shipments through the remainder of the summer into the fall, when help could be on the way in the form of initial interest rate cuts, increased housing activity, lower container rates, and improvements in consumer confidence as life returns to “normal” postelection cycle.  Hope our friends here in the States enjoy their July 4th holidays.”

Highlights of the Executive Summary

·      New orders were up 22% in April 2024 compared to April 2023 (which was down 19% from April 2022

·      Year to date through April 2024, new orders are up 8% compared to 2023.

·      New orders were flat compared to the prior month of March 2024.

·      Shipments appear to have begun normalizing compared to last year

·      Shipments in April 2024 are up 2% from April 2023, but down (1)% from March 2024

·      Year to date through April 2024, shipments are down (9)% compared to 2023.

·      April 2024 backlogs were down (12)% compared to April 2023, but up 2% from March 2024.

·      Receivable levels were consistent with March 2024, but down (3)% from April 2023
Inventories and employee levels are in line with recent months, but down from 2023
 

National Consumer Confidence

The Conference Board Consumer Confidence Index® dipped in June to 100.4 (1985=100), down from 101.3 in May.

“Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future. However, if material weaknesses in the labor market appear, Confidence could weaken as the year progresses,” said Dana M. Peterson, chief economist at The Conference Board. “Compared to May, consumers were less concerned about a forthcoming recession. However, consumers’ assessment of their Family’s Financial Situation—both currently and over the next six months—was less positive.”

Highlights Monthly Results

According to the latest survey of residential furniture manufacturers and distributors, new orders were up 22% in April 2024 compared to April 2023 (which was down 19% from April 2022), continuing our streak of 10 out of the last 11 months with overall order growth over the prior year.

While the elevated percentage would appear to be a bit of an outlier compared to recent months, approximately 75% of the participants reported increased orders in April 2024 compared to a year ago. However, new orders were once again flat compared to the prior month of March 2024. Year to date through April 2024, new orders are up 8% compared to 2023.

To read the report in its entirety, visit Smith Leonard’s website.