by Decrease follows 25% year-over-year drop in orders in January
HIGH POINT — New orders for residential furniture in February were down 17% from February 2022 while shipments were down 6% during the same year-over-year period, according to the latest Furniture Insights report by Smith Leonard.
New orders totaled $2.05 billion, compared to $2.5 billion in February 2022, while shipments totaled $2.44 billion, down from $2.6 billion in February 2022.
New orders, however, were up from $1.97 billion in January. Shipments were also up slightly from the $2.4 billion reported in January.
Smith Leonard said that orders were down for 80% of the participants in its survey of residential furniture manufacturers and distributors. Shipments were down for only 56% of the survey participants.
It also added that orders were down 20% for the first two months of the year, compared to 10% in February 2020, just before the start of the pandemic. Shipments were down 4% year to date.
“Obviously there have been several price increases from that time, so the decline in units is likely more, depending on the mix of products,” the report said of new orders.
Meanwhile backlogs have lowered considerably, to $3.4 billion, compared to $8.9 billion in February 2022. They were also down slightly from the $3.6 billion reported in January.
Year over year, payrolls were down 8% in February, employee levels were down 5% and receivables were down 12%. February inventory levels were up 5% from last year, but down 9% from January.
“Receivable levels seem to be in line, and in talks, seem to be in good shape,” the report said. “There are some concerns over the slow business at retail, which may cause cash flow issues for some.”
It noted that the current inventory levels, while up from February of last year, are “much more in line with current business. At least some of the increase over last year is in price increases, though that will change as some freight costs have now dropped.”
“As with inventories at the retail level, inventories continue to seem a bit high, likely at the case goods level as logistics issues have caused fluctuations in the need for inventories,” the report added.
It said that the decrease in number of factory and warehouse workers compared to February 2022 was largely due to attrition and that the 8% decline in payrolls reflects lower numbers of workers and some reduced time.
