New furniture orders fell 9% in September from last year, continuing a steady decline that began in May, according to Smith Leonard in its latest Furniture Insights report.

After a strong start to the year, orders are now even with 2023. On the positive side, orders were 5% up over the previous month of August, which in turn saw a 12% boost from July.

September orders were down for 63% of survey participants compared with last year. Shipments for the month were down 7% from last year and also down 7% from last month. Year-to-date shipments are down 8% from 2023.

September backlogs were down 10% from last year but up 1% from last month. Receivable levels were down 8% from last September and down 1% from August. Both are materially in line with respective shipment trends, said Smith Leonard.

Inventories and employee/payroll levels are also materially in line with recent months but down 5% from 2023, “indicating that companies have aligned levels to match current operations.”

Mark Laferriere, assurance partner at Smith Leonard, gave some overall thoughts:

“This month, we saw a few of the national economic indicators trending in the right direction, particularly in consumer confidence and existing-home sales, though new residential housing activity continues to lag behind,” he wrote. “These gains will need to be sustained to meaningfully filter down to the furniture industry, as we continue to see a decline in current orders and shipments for participants in our survey compared to a year ago. However, a review of recent public company results does provide some hope that the year-over-year declines have narrowed in their last quarterly filings on average.

“Early reporting on Black Friday indicates that activity was up overall, though online purchases made up for the reduction at brick-and-mortar retail.

“We also saw another 0.25% interest rate cut in November, which followed the 0.50% in September. The Fed meets again in mid-December, so it will be interesting to see how they approach possible tariffs and the potential impact on inflation, future interest rate adjustments and ultimately housing that drives so much activity in the industry.

“While we have seen most of our clients significantly reduce their reliance on China produced goods over the past 10 to 15 years, there is still little doubt that tariffs will be disruptive to the overall industry, providing both challenges and opportunities.”

Source: furninfo.com