From Home Furnishing Business
Furniture Orders Rise Again in September
High Point accounting and consulting firm Smith Leonard conducts the monthly survey or residential furniture manufacturers and distributors. September results were "somewhat in line with expectations," wrote Smith Leonard Managing Partner Ken Smith in the report on Septmeber activity. "Most of what we had heard at Market was that business was reasonably good up until the government shutdown. Year-to-date, orders were up nicely at 6 percent."
September shipments rose very nicely, 11 percent, versus September 2012; and remained up 4 percent year-to-date. Receivable levels were in very good shape considering increased shipments over both September 2012 as well as August 2013. Inventories are up 5 percent over last year, the highest percentage we have noted lately but still seem reasonable based on business levels.
Factory and warehouse employment rose 3 percent over last year, up from a 2 percent increase reported last month.
"Overall, September results were pretty much in line with expectations and in line with most of the talk we heard at Market," Smith said. "It will be interesting to see what the October results bring. As we reported last month and heard at Market, business at retail slowed due to the government shutdown. Then it seemed to improve a bit right before Market. Since Market was late this October, many market orders will likely not be reflected in our next survey so we may need to look at October and November together to get a good handle on the impact of Market."
Typical indicators for the furniture business are looking up, but they aren't reflecting consumer activity in the sector.
"Existing home sales are slowing a bit due mainly to lack of inventory and some loan issues, but still growing over last year in spite of higher prices," Smith said, noting that retail sales rose in October, along with sales at home furnishing store; and that the stock market is rising. "Interest rates remain very low with no apparent need for them to increase any time soon, at least to any significant degree. Gas prices have come down even right before the Thanksgiving Holiday Season. So why is there not joy in Mudville? Well, mainly because consumer confidence remains too low. Confidence fell again in October and according the Conference Board, this consumer sentiment could cause concern for the Holiday Season.
"It really is a shame that confidence is low. When we think back to good times of the past, we always equated low interest rates, a good stock market, growing employment, good housing markets, and low inflation to good business for the furniture industry. What we seem to be proving for sure is that while all of that is helpful, what we really need is strong consumer confidence, and that seems to be what is holding the whole economy back."