December factory orders down 6%
By Furniture Today Staff -- Furniture Today, March 11, 2007
High Point — U.S. residential furniture factory orders in December were down 6% from December 2005, and orders for all of 2006 were off 3% from the previous year, according to Smith Leonard.
The accounting and consulting firm said factory shipments also fell, declining 5% in December and 2% for the year.
For the year, about 68% of the participants in Smith Leonard's factory survey reported declines in orders.
Ken Smith, managing partner of Smith Leonard, said in the firm's monthly Furniture Insights newsletter that while he hears reports of business picking up from time to time, "there does not seem to be any steady improvement."
He noted the survey's results are based on dollar volume rather than pieces, and that prices continue to deflate because of imports. Moreover, the survey doesn't capture sales made directly to U.S. retailers from overseas suppliers, only those flowing through U.S.-based manufacturers and distributors.
That means U.S. furniture retailers likely are doing better than the factories in Smith Leonard's survey, he said. Still, traditional furniture stores may be losing some ground to newer distribution channels, such as big-box stores, he added.
"Many of these (traditional) retailers are the ones who are buying from U.S.-based manufacturers and distributors," said Smith.
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