Smith Leonard Reports April 2025 Furniture Insights

May 6, 2025  by Karen Parrish in Business Strategy, Industry   

According to the executive summary, new orders were down 5% in February 2025 compared to February 2024. However, new orders were up 2% compared to the prior month of January 2025. Year to date through February 2025, new orders are down 4% compared to 2024.

Shipments were also down 5% in February 2025 compared to February 2024. Shipments were down 8% compared to the prior month of January 2025, which may be a function of the short month. Year to date through February 2025, shipments are flat compared to 2024. 

February 2025 backlogs were down 6% compared to February 2024, but up 2% from January 2025 as new orders outpaced shipments during the month. Receivable levels were up 1% from January 2025, and down 1% from February 2024.

Inventories were down 1% from January 2025 and down 2% from February 2024, which are in line with prior periods and current operational levels.

Inventories and employee/payroll levels are again materially in line with recent months, but down from 2024, indicating that companies have aligned levels to match current operations.

According to the Consumer Confidence Board, the Conference Board Consumer Confidence Index® fell by 7.9 points in April to 86.0 (1985=100). The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—decreased 0.9 points to 133.5. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—dropped 12.5 points to 54.4, the lowest level since October 2011 and well below the threshold of 80 that usually signals a recession ahead. 

“Consumer confidence declined for a fifth consecutive month in April, falling to levels not seen since the onset of the COVID pandemic,” said Stephanie Guichard, senior economist, Global Indicators at The Conference Board. “The decline was largely driven by consumers’ expectations. The three expectation components—business conditions, employment prospects, and future income—all deteriorated sharply, reflecting pervasive pessimism about the future."

"Notably, the share of consumers expecting fewer jobs in the next six months (32.1%) was nearly as high as in April 2009, in the middle of the Great Recession. In addition, expectations about future income prospects turned clearly negative for the first time in five years, suggesting that concerns about the economy have now spread to consumers worrying about their own personal situations. However, consumers’ views of the present have held up, containing the overall decline in the Index.”

On a six-month moving average basis, purchasing plans for both homes and cars declined, as did vacation intentions. Plans to buy big-ticket items—including appliances and electronics—pulled back in April but were mostly up on a 6-month moving average basis. Consumers’ overall intentions to purchase more services in the months ahead were down, with almost all services categories affected. While dining out remained number one among spending intentions, the share of consumers planning to spend more on dining out in the months ahead registered one of the largest month-on-month declines on record in April. 

Existing-home sales descended in March, according to the National Association of REALTORS®. Sales slid in all four major U.S. regions. Year-over-year, sales dropped in the Midwest and South, increased in the West and were unchanged in the Northeast. 

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell 5.9% from February to a seasonally adjusted annual rate of 4.02 million in March. Year-over-year, sales drew back 2.4% (down from 4.12 million in March 2024). 

Single-family home sales retreated 6.4% to a seasonally adjusted annual rate of 3.64 million in March, down 2.2% from the previous year. The median existing single-family home price was $408,000 in March, up 2.9% from March 2024.

Real gross domestic product (GDP) decreased at an annual rate of 0.3% in the first quarter of 2025 (January, February, and March), according to the advance estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4%. 

Sales at furniture and home furnishings stores in March 2025 were down 0.1% compared to February 2025 on a seasonally-adjusted basis, but up 7.7% from March 2024. Year to date on a non-adjusted basis, sales were up 4.9% (3.8% last month). 

According to our latest survey of residential furniture manufacturers and distributors, new orders were down 3% in January 2025 compared to January 2024. However, despite the overall decrease, approximately two-thirds of participants reported increases versus decreases in January 2025 compared to a year ago. New orders were up 2% compared to the prior month of December 2024, which would seem to include some seasonality due to the December holiday break. 

New orders were up 2% compared to the prior month of January 2025, which were also up 2% over December 2024. Year to date through February 2025, new orders are down 4% compared to 2024. 

February 2025 shipments were down 5% compared to February 2024, and also down 8% compared to January 2025. Consistent with new orders, shipments in January 2025 were up for approximately half of the participants compared to February 2024 despite the overall decrease. Year to date through February 2025, shipments were flat compared to 2024. 

February 2025 backlogs were down 6% compared to February 2024, but up 2% from January 2025 as new orders outpaced current shipments during the month. 

Receivable levels were up 1% from January 2025, but down 1% with January 2024, which may be an indication of a slight worsening in collective agings (given lower shipment rates) but could still just be normal timing differences with collections.

Inventories were down 1% from January 2025 and down 2% from February 2024, which are in line with prior periods and current operational levels.

THOUGHTS FROM MARK LAFERRIERE, ASSURANCE PARTNER

"It was certainly great to see many of you in sunny High Point last week for Market."

"Expectations were understandably tempered coming in, but most people we spoke with were pleasantly surprised. Tariffs were obviously a huge topic of conversation, but some said it still felt like a “normal” market, with others saying it was one of their best in recent years due in part to exciting new introductions and/or new opportunities with retailers exploring their domestic versus import options. While traffic was reported to be down (particularly international), those who were there seemed ready to do business."

"Most we spoke with said they understood the need for action on the global economic front but took issue with the rollout and disruption and uncertainty that it caused, particularly right before Market. What’s clear is that with limited exceptions, everyone within the industry will be impacted by tariffs in some form or fashion, even those generally considered to be “domestic” manufacturers due to international sourcing of components such as fabric. For now, clearly the less exposure to China goods, the better, for those with foreign supply chains."

"Meanwhile, consumer confidence declined for a fifth consecutive month, though there do seem to be some positive signs with housing and the stock market volatility seems to have calmed down for the moment(as of this writing)."

"As to our monthly stats, due to the 2-month lag, we are still reporting on pre-tariff activity. However, new orders were down approximately 4% for our participants year-to-date through February 2025 compared to 2024.That said, we have seen industry reports and heard from people at Market that there may be some demand being pulled forward in March and April 2025 in response to the tariffs (similar to auto and appliance reports), so it will be interesting to see how that plays out over the next few months as the tariff story plays out.