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From Home Furnishing Business

Smith Leonard Releases February Furniture Insights

Smith Leonard Accountants & Consultants Released their February furniture insights with their monthly thoughts on consumer confidence, sales, and tariffs.

New orders were up 1% in December 2024 compared to December 2023. Year to date through December 2024, new orders were again down 1% compared to 2023. New orders were down 15% compared to the prior month of November 2024, which seems to include some seasonality due to the December holiday break (was down 22% month over month last year).

December 2024 shipments were down 2% from December 2023, and down 7% from November 2024. Year to date through December 2024, shipments were down 6% from 2023.

December 2024 backlogs were down 8% compared to December 2023, and down 2% from November 2024.

Receivable levels were up 1% from October 2024, but down 4% from November 2023, both of which are materially in line with the respective shipment trends.

Inventories and employee/payroll levels are again materially in line with recent months (though December payroll was down from November due to holidays), but down from 2023, indicating that companies have aligned levels to match current operations.

National Consumer Confidence

The Conference Board Consumer Confidence Index® declined by 7.0 points in February to 98.3 (1985=100)

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell 3.4 points to 136.5.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—dropped 9.3 points to 72.9.

For the first time since June 2024, the Expectations Index was below the threshold of 80 that usually signals a recession ahead. The cutoff date for preliminary results was February 19, 2025. “In February, consumer confidence registered the largest monthly decline since August 2021,” said Stephanie Guichard, senior economist, global indicators at The Conference Board.

“This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022. Of the five components of the Index, only consumers’ assessment of present business conditions improved, albeit slightly. Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high.”

On a six-month moving average basis, purchasing plans for homes continued to recover, likely supported by the very recent decline in mortgage rates. On the other hand, buying plans for cars and big-ticket items were down, with notable declines for TVs and electronics. Consumers’ overall intentions to purchase additional services in the months ahead were changed little, but their priorities shifted slightly: personal and health care, as well as movies and live entertainment, moved up the priority list, at the expense of streaming and travel. Vacation plans continued to trend downward.

Thoughts FROM Mark Laferriere, Assurance Partner

Tariffs certainly dominated the news and conversations last month, and as of press time, we again find ourselves waiting on Tuesday’s announcement to hear exactly what level of tariffs will ultimately go into effect for Canada, Mexico, and China, with the looming threat of potentially others being added in the future.

While the housing data was mixed, consumer confidence really took a hit this month, so it will be interesting to see whether this is the start of an enduring trend or hopefully just a temporary blip that will reverse itself once much the current uncertainty is resolved.

To see a copy of the full report visit the Smith Leonard website.



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