Nov. factory orders down 3%
Smallest decline since May
By Furniture Today Staff -- Furniture Today, February 10, 2002
High Point — New orders at U.S. residential furniture factories were down 3% in November from the same month a year earlier and shipments were off 11%, according to BDO Seidman.
The good news is that the November orders decline was the smallest since May, and orders were up 8% from October.
For the first 11 months of last year, orders and shipments were both down 10% from the 2000 pace, the accounting and consulting firm said. December results are expected to be slightly better than a year earlier, but the full year's decline is still likely to be in the 9% to 10% range, BDO said.
Orders were estimated at $2.13 billion in November and $22.37 billion for the first 11 months. Shipments of $2.01 billion brought the year-to-date total to $22.58 billion.
The order backlog of $2.04 billion in November was up 5% from October but down 20% from November 2000.
BDO also tracks manufacturers' receivables, and estimated these were down 15% in November from a year earlier in November, significantly more than the decline in shipments. "We believe much of the more-than-expected decrease is due, at least in part, to the demise of some of the larger retailers who expected, and got, extended terms," said the firm's Furniture Insights monthly newsletter.
Ken Smith, director of BDO's furniture industry practice here, said economic indicators continue to be a mixed bag, with consumer confidence still fragile but "moving in the right direction."
A key concern, he said, is that consumer spending has held up well in the recession, with sales spurred by deep discounts and no-interest auto loans.
"The question becomes," he said, "have we created future problems because consumers are so conditioned to 'deals' and only want to buy deals?"
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