Daily News

From Home Furnishing Business

Smith Leonard Reports August 2025 Furniture Insights

September 3, 2025  by Karen Parrish in Business Strategy, Industry   

According to the Executive Summary, new orders were down 9% compared to the prior month of May 2025 following the 11% increase over April 2025. However, new orders were up 3% in June 2025 compared to June 2024. Accordingly, year to date through June 2025, new orders are now down 2% compared to 2024 (down 3% last month).

Shipments were down 2% compared to the prior month of May 2025. Shipments were also down 2% in June 2025 compared to June 2024. Year to date through June 2025, shipments remain down 1% compared to 2024. June 2025 backlogs were down 8% compared to June 2024, and down 2% from May 2025.

Receivable levels were down 2% from May 2025, and down 6% from June 2024. Inventories and employee/payroll levels are again materially in line with recent months and the prior year. However, with the gradual decline in employees over the last 5 months, it does appear companies are continuing to allow some normal attrition to occur without rushing to find replacements.

The Conference Board Consumer Confidence Index® fell by 1.3 points in August to 97.4 (1985=100), down from 98.7 in July (revised up by 1.5 points).

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell by 1.6 points to 131.2.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—decreased by 1.2 points to 74.8.

Expectations remained below the threshold of 80 that typically signals a recession ahead.

“Consumer confidence dipped slightly in August but remained at a level similar to those of the past three months,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board.

“The present situation and the expectation components both weakened. Notably, consumers’ appraisal of current job availability declined for the eighth consecutive month, but stronger views of current business conditions mitigated the retreat in the Present Situation Index. Meanwhile, pessimism about future job availability inched up and optimism about future income faded slightly. However, these were partly offset by stronger expectations for future business conditions.”

Real gross domestic product (GDP) increased at an annual rate of 3.3% in the second quarter of 2025 (April, May, and June), according to the second estimate released by the U.S. Bureau of Economic Analysis. In the first quarter, real GDP decreased 0.5%.

The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending. These movements were partly offset by decreases in investment and exports.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 1.9% in the second quarter, revised up 0.7 percentage point from the previous estimate. Sales at furniture and home furnishings stores in July 2025 were up 1.4% compared to June 2025 on a seasonally adjusted basis, and up 5.1% from July 2024. Year to date on a non-adjusted basis, sales were up 5.7% (same as last month).

THOUGHTS FROM MARK LAFERRIERE, ASSURANCE PARTNER

Those of us who thought the industry had received some level of clarity on tariffs after months of uncertainty were dealt a surprise this month with the doubling of India tariffs to 50%, the elimination of the $800 deminimis import exception, a delay in finalizing China rates, and most significantly the announcement of potential additional furniture-specific tariffs following a 50-day investigation into the industry.

Taken together, this will clearly create a new round of disruption for an industry looking for certainty and normalcy. As to what we do know, while consumer confidence slipped slightly again this month and housing bumped along, positive trends with employment, consumer spending, stock markets, and GDP continue to persist in spite of various challenges. And as the Fed continues to take a wait and see approach to inflation despite immense pressure to cut rates in its upcoming September meeting, it’s difficult to determine how any nominal cuts would impact housing in the near-term before ultimately trickling down in the form of new orders and revenues.

As to our own stats program, it was disappointing to see June’s 9% average decline in month-over-month new orders after May’s 11% average increase. Hopefully this is a function of timing, as the year-to-date decreases in new orders (2%) and shipments (1%) for our participants through June 2025 seem materially in line with other industry and economic reporting.

With the two-month lag in our reporting period, we’re now halfway through the year, which coupled with this month’s news, may make it tough for the industry to make meaningful gains for 2025 as a whole. However, successful companies will prioritize their relationships with employees and customers and proactively control what they can control to take advantage of available opportunities.