Furniture factory orders decline 5% in October

Second monthly dip in a row, Smith Leonard reports

Jay McIntosh -- Furniture Today, December 30, 2010

HIGH POINT — U.S. residential furniture factory orders in October were down 5% from the same month last year, the second monthly decline in a row, according to Smith Leonard.

For the year to date, orders were up 5% through October, the accounting and consulting firm said. In 2009, orders through October were down 16% from the 2008 pace.

Ken Smith, managing partner of Smith Leonard, wrote in his monthly Furniture Insights newsletter that the results were not unexpected, based on what he heard at the High Point Market in October. But with the event ending late in the month, "the results of market will not really be known until next month."

Factory shipments, which tend to lag orders by a few months, were up 3% in October from the same month in 2009. For the year to date, shipments were up 8% through October. In 2009, shipments were off 18% from 2008 for the same 10-month period.

Smith said the results of participants in the firm's factory survey "have varied by a great degree, with some posting some reasonable gains, but the majority reporting declining order rates, which will lead to declining shipments in some of the coming months."

He added that the economy seems to be gaining some strength with consumers no longer worried about a double-dip recession, although high unemployment continues to dampen their confidence. On the positive side, job losses have subsided, the stock market has returned to mostly 2008 levels and the tax cut extension came through, Smith said.

"We do expect 2011 to start showing some improvement, but the home furnishings industry tends to take a little longer than others to show signs of recovery. In spite of the slowdown since the August-September time frame, we do expect that we will see 2010 was the year where the industry finally bottomed out. We sure hope so," he said.