U.S. furniture factory orders drop 24% in January vs. 2008
Fourth month in a row with a decline of more than 20%
Furniture Today Staff -- Furniture Today, April 1, 2009
HIGH POINT — U.S. furniture factory orders in January were down 24% from the same month a year earlier, the fourth month in a row with a decline of more than 20%, according to Smith Leonard.
The accounting and consulting firm said that about 95% of the participants in its monthly factory survey reported declines in orders. "Some 76% of the participants were off more than 20% with some reporting even more serious double-digit declines," Ken Smith, managing partner of Smith Leonard, wrote in his Furniture Insights newsletter.
He added that based on conversations with people in the industry, he does not expect February results to be much better.
"On the good news side, we heard that (High Point's) premarket was very well attended. On top of that, we heard that many of the retailers were saying their inventories were down and they were looking to refurbish their selling floors," said Smith. However, he added that many retailers were not expecting much short-term improvement and were gearing their businesses for current levels of volume.
He said the industry is still selling "lots of furniture," but said some is going at discounted prices that reduce profits for factories and stores.
"Furniture for the most part is a great value. We need to return to selling it for what it's worth so profits can be made," said Smith. "Unlike most of Congress, we think profits are not only a good thing, but are essential if we want to be around very long."
Furniture factory orders, shipments in January
In billions of dollars | |||
| Change from | |||
| December '08 | January '08 | ||
| New orders | 1.462 | 3% | -24% |
Shipments | 1.391 | -11% | -24% |
| Order backlog | 1.218 | 1% | -22% |
Source: Smith Leonard |
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