Furniture analysts reports show mixed state of industry
While some positive trends have continued of late in the furniture industry, retail sales have been sluggish.
Two analysts of the industry recently published reports that reached these seemingly contradictory conclusions.
A survey by High Point accounting firm Smith Leonard of residential furniture manufacturers and distributors found that new furniture orders were up in April 11 percent over April 2012.
Shipments were up 2 percent for the month over April 2012, and held at 1 percent above last year for the first four months of 2013. Backlogs were steady compared to March but were 6 percent higher than last year due to the increased April orders, according to the firm’s monthly newsletter, Furniture Insights.
“Except for a few bleeps in the stock market and the continued worry over the effects of the health care act on business and the economy in general, the stars seem to be lining up in our favor,” said Ken Smith, an accountant and author of the newsletter. “Obviously, we are not seeing major gains all over, but overall, the picture does seem brighter, and that is a good thing.”
Smith said receivables and inventory levels were up 4 percent over last year, while factory and warehouse payrolls are 2 percent above last year through the first four months of 2013.
In his Furnishings Digest Newsletter for June, Jerry Epperson of Mann, Armistead & Epperson, an investment banking firm in Richmond, Va., noted that first-quarter home furnishings retail sales were down 0.3 percent nationwide from the same period of 2012.
Retail sales were up during 2012, so the drop-off to start the year was a “shock,” Epperson noted.
“The furniture industry has been disappointing this year,” his report stated.
In keeping with the trend of the past few decades, wood furniture imports were up 4.7 percent, while domestic shipments were down 2.7 percent for the first quarter, according to the report. Imports of upholstery were up 12.7 percent compared to domestic shipments, which rose 1.3 percent. Epperson said domestic mattress shipments were down 3.3 percent in the first quarter, compared to a gain of 19.2 percent a year ago.
He said he thinks the worst has passed for 2013, and pointed out that consumer confidence was at a five-year high in May. The housing market also continues to show improvement, with May new-home prices up 8 percent, the best since 2005, according to the report.