Furniture industry faced tricky September
The furniture industry yielded some unusual results that has executives saying its all about timing.
New furniture orders during September soared to double digit increases over September 2011. According to Furniture Insights, a newsletter written by Ken Smith of Smith Leonard CPA, new orders were up 10 percent.
“We believe some of the monthly increase may have been related to timing of some of the orders as several participants reported significant double digit increases,” Smith said.
Year to date, new orders hold steady at 5 percent, the same percentage as last month’s report. In September 2011 year-to-date orders were at 6 percent.
Shipments in September were down 1 percent from September a year ago. Smith said he believes this was a matter of timing.
“In September 2012, there were only 19 working days compared to 21 a year ago, so that probably impacted the shipping results,” Smith said.
Shipments year-to-date were up 7 percent after an 8 percent increase reported last year. Through September 2011, shipments were up 3 percent over the same period in 2010.
As expected when orders are higher than shipments, backlogs rose 9 percent over August. Receivables also fell 1 percent from last September.
“Since receivable levels have been in line most of the year, we expect that this month’s unusual results were a result of timing,” Smith said.
Smith said that consumer confidence and housing also increased in September. Home prices are rising giving people a bit more confidence as well. Interest rates are low. And the GDP is showing positive signs. According to the government reports, retail sales at furniture and home furnishings stores were up 8.4 percent for the first 10 months of 2012.
“Overall, we have some pretty good things to feel good about,” Smith said.