Factory orders up 1% in December, reversing decline

2010 ends with sales and shipments up for the first time in four years

Furniture Today Staff -- Furniture Today, March 1, 2011

HIGH POINT — Furniture factory orders in December were up 1% from the same month a year earlier, ending three months of declines, Smith Leonard reported.

That left orders for all of 2010 up 4% from the previous year, the accounting and consulting firm said. The gain ended a four-year decline that saw orders and sales slide 30% from 2005 to 2009, Ken Smith, managing director of Smith Leonard, said in his monthly Furniture Insights newsletter.

Shipments from U.S. residential furniture factories were up 3% in December and up 7% for the full year, according to Smith Leonard's monthly survey.

For the year, about 52% of the survey participants reported increases in orders from 2009 - a sharp improvement from last year, when 91% said orders were down from 2008.

"After four long years of declining orders and sales, our participants finally had a year where both sales and orders were up for the year," Smith said. He added, "While some of the dollar decline has been due to lower prices of both imported and domestically produced goods, such a decline certainly took a toll on the industry."

He added that he continued to believe 2011 will be somewhat better than 2010, with the year starting with improved consumer confidence and an improved economy. Yet he said unrest in the Middle East - and some U.S. states - is causing concerns, especially related to the price of oil, gasoline and other petroleum-based products.

Rising commodity prices also could lead to inflation, he said, and winter storms dampened retail sales.

"We do not expect the first quarter to be anything to write home about, but if we can keep the economy at least plugging along, 2011 should see some improvement," said Smith.