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Furniture factory orders up 3% in June, but not all benefit

HIGH POINT - Orders in June were up 3% from the same month a year earlier at U.S. residential furniture factories, according to Smith Leonard's monthly factory survey.
     "The results were somewhat of a mixed bag though," Ken Smith, managing partner of the accounting and consulting firm, wrote in his monthly Furniture Insights newsletter. "Only 47% of the (survey) participants reported increased orders, down from 69% a year earlier."
     Furniture shipments in the month were up 7% from a year earlier, the firm said. Shipments outpacing orders means factories are eating into their order backlogs - although backlogs are still higher than they were a year ago, Smith said.
     For the first half of this year, orders were up 4% with 56% of survey participants reporting increases. Shipments through June were up 9% from a year earlier.
     National economic indicators also present a mixed bag for the industry, Smith said.
     "The economy is moving ahead very slowly, at a pace that is not likely to help matters very much. On the other hand, housing is showing some nice signs of recovery. Existing home sales showed the fifth consecutive monthly increase and in July were 9.9% ahead of July 2011," he said.
     He also noted that government reports show sales at furniture and home furnishings stores were up 9.3% through July. But a recent decline in the Consumer Confidence Index - which was down 4.8 points to 60.9 in August - was not good news, and Smith said he believes negative political ads are having an effect on consumer attitudes.

Factory orders, shipments in June

In billions of dollars

   
  

Change from

  

May '12

     June '11

New Orders

$1.753

-8%

3%

Shipments

2.058

-3%

7%

Order backlog

1.696

-6%

3%

 

Jan-June

     Change from 2011

New Orders

$11.132

4%

Shipments

11.399

9%

Source: Smith Leonard

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