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U.S. furniture industry rebounds for two
U.S. manufacturing remains weak, but the furniture segment is continuing to shine for the second month in a row.
The Institute for Supply Management’s June report measured the manufacturing sector at 46%, a 0.9% decline from May and the eighth consecutive month of contraction. The sector is hovering just slightly higher than its low point in May 2020, when it saw one of its poorest performances ever at 43.1%.
“The U.S. manufacturing sector shrank again, with the manufacturing index losing ground compared to the previous month, indicating a faster rate of contraction,” said Timothy R. Fiore, ISM chairman. “The June composite index reading reflects companies continuing to manage outputs down as softness continues and optimism about the second half of 2023 weakens. Demand eased again, with new orders contracting but at a slower rate, new export orders moving into contraction and the sector’s order backlog remaining at a level not seen since early in the coronavirus pandemic. A potential bright spot: customers’ inventories dropped into ‘too low’ territory, a positive for future production.
“Demand remains weak, production is slowing due to lack of work, and suppliers have capacity,” he continued. “There are signs of more employment reduction actions in the near term. 71% of manufacturing GDP contracted in June, down from 76% in May. More industries contracted strongly, however.”
Furniture however, just like in May, outperformed the overall sector. New orders contracted for 13 of the manufacturing industries recognized by the ISM, but not for furniture, which reported the third biggest order increase. Last month it was also an outlier, being one of just three to report an increase. May marked the first increase in new furniture orders for the first time in 13 months. The month before in April, it had reported the biggest contraction of all 18 industries.
Eight industries reported growth in production, with furniture among them in second place.
On the employment side, just six industries saw growth. Furniture was among them, posting the second biggest gain.
Furniture saw the single biggest increase in supplier delivery speeds. It was one of 15 to report lower inventories in June, and it was one of nine to report that customers’ inventories are too low.
All industries except three reported paying less for raw materials, with furniture among them.
Source: The Institute for Supply Management