Shipments up 3% in '05
By Furniture Today Staff -- Furniture Today, March 5, 2006
High Point — A slightly weaker December left 2005 a year of modest gains for U.S. furniture factories, with shipments up a little over 3% from 2004, according to BDO Seidman.
New orders were up 2.35% for the year, but factories kept shipments higher by working off some of their backlog, which was down 7% on average, the accounting and consulting firm said.
In December, shipments were down 2% and orders were off 1% from the same month a year earlier, according to BDO's factory survey.
Last year's 3% gain in shipments was just half the 6% increase reported in 2004. Only about 38% of the survey respondents reported shipment gains for the year, said Ken Smith, national director of BDO's Furniture Industry Services, in his Furniture Insights newsletter.
"The year was a good one for a number of our participants. It was also a struggle for many ... who lost market share in some pretty big ways," Smith said. "Also, a number of the participants are still trying to determine the balance between domestic production and imports, a difficult task for sure."
Perhaps indicative of the shift in mix, the number of U.S. furniture factory employees declined 5% last year and payrolls were down 1% from 2004, BDO reported.
Economic indicators and performance so far this year have been mixed, with some retail segments doing well and others not, Smith said. Among leading economic indicators in January, the one negative was a decline in consumer confidence. With interest rates rising and gas prices still relatively high, that's not a good sign for deferrable purchases like furniture, he said.
"We continue to expect growth as an industry for 2006, but as we have seen the past few years, that growth is not necessarily for everyone," said Smith. "This means, unfortunately, those who succeed in 2006 will have to work very hard for that success, as significant growth will likely mean taking someone else's market share."
| Factory orders, shipments in December | |||
|---|---|---|---|
| In billions of dollars | |||
| Change from | |||
| Nov. '05 | Dec. '04 | ||
|
Source: BDO Seidman |
|||
| Orders | $1.978 | -11% | -1% |
| Shipments | 2.185 | — | -2% |
| Order backlog | 1.874 | -9% | -7% |
| January–December | Change form 2004 | ||
| Orders | $26.336 | 2% | |
| Shipments | 26.988 | 3% | |
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2005 year of modest gains
Mar 2, 2006
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