by Smith Leonard Furniture Insights report notes 77% of survey participants reported a slowdown compared to last year
HIGH POINT — New orders for residential furniture rose 5% in January from December, but fell 25% from January 2022, according to the latest Furniture Insights report from Smith Leonard.
Meanwhile, January shipments fell 4% below December levels and were down 3% from January 2022.
New orders totaled $1.97 billion in January, up from $1.88 billion in December and down from $2.65 billion in January 2022. Some 77% of the survey participants reported decreases in orders compared to January 2022.
However, the report described the comparison as difficult because of the need for some type of historical reference before the pandemic. For example, it noted that in January 2020, new orders were up 2%, which it called a reasonable increase following an 8% increase in January 2019. In January 2021, new orders were up 27% over January 2020, followed by a 12% decline in January 2022.
“Putting all that together and adding in price increases, it is difficult to compare what the results really mean,” the report said.
January shipments totaled $2.4 billion, compared to $2.48 billion in December and $2.49 billion in January 2022. Just over half the survey participants reported a decrease in shipments compared to the prior year. The report noted the comparisons of shipments have not fluctuated with orders because of the many issues involving goods coming from Asia, along with challenges experienced by domestic manufacturers ranging from access to materials to labor shortages.
The report went on to note that January backlogs totaled $3.6 billion, down 7% from the $3.87 billion reported in December and down 40% from the $9.1 billion reported in January 2022. It said that backlogs remain higher than 2019 levels, although the increase could largely be due to price increases of 20% to 30% it believes are reflected in the reported backlogs.
Other highlights are as follows:
+ Receivable levels fell 1% from December and were 8% below January 2022. “Most of what we are seeing says that receivable levels remain in pretty good shape, but will need to be watched as business at retail has slowed, which will slow retailer abilities to stay as current as they were when good business required staying current in order to get product shipped,” the report said.
+ Inventories fell 5% from December, but were up 20% from January 2022, the report said, adding, “That result is much better than the 40% to 50% increases that have been reported for several months as inventories were increased to cover demand, as well as shortages of product and materials.”
+ The number of factory workers was down slightly from December and January 2022. “We imagine turnover has taken care of the need for fewer employees as business has slowed,” the report said, adding, “Many domestic manufacturers still complain that they need more workers, but that does not seem to be across the board.”
+ Payrolls rose 5% from January 2022, which the report said reflected higher wages, offset some by the lower number of employees.
