• Powell Slaughter

Furniture Insights: July orders register double-digit increase

HIGH POINT – New orders for furniture rose 11% in July compared with the same month last year according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from accounting and consulting firm Smith Leonard.

The double digit increase in orders followed followed increases reported in June of 6%, May of 8% and April of 7% when compared with the same months in 2016. New orders were down from June some 12%, but most companies had shut down for the holiday week of the Fourth of July.

New orders in July 2017 rose for 67% of the participants, up from about 60% reporting increases in the last two months.

Year-to-date, new orders were up 7% compared with the same period a year ago.

July shipments rose 10% July 2016 levels after being up 7% in June vs. June 2016. Shipments in July fell 20% from June, largely due to the holiday shutdown. Shipments in July were up for Some 70% of survey participants reported increased July shipments, down from 83% saying they rose in June.

Year-to-date, shipments remained 5% ahead of last year.

Backlogs rose 4% from June and were up 8% over July 2016.

July 2017 receivables were up 7% higher from July 2016 and were down 6% lower from June levels.

“Both the increase from last year and the decrease from last month appear to be very much in line with the respective increase and decrease in shipments in the month compared to last year and last month,” said Smith Leonard Partner Ken Smith in the survey report. Inventory levels rose 2% in July from June and were up 3% higher from July 2016 levels, in line with current business.

Factory and warehouse payrolls increased 6% over July 2016, in line with the increase in orders and shipments. The payrolls were down 17% from June 2017, mostly due to the Fourth of July holiday week.

July factory and warehouse employment rose slightly from June but was off 3% from July 2016.

“Overall though, these numbers tend to fluctuate slightly from month to month, so we continue to think they are in line,” Smith said.

In summary, Smith said that while solid growth in new orders since March is good for many in the industry, challenges remain. “Unfortunately, especially for those in the path of hurricanes Harvey and Irma, things will definitely be choppy for a while,” Smith noted. “The recovery periods have definitely slowed business in Florida and Texas as well as lingering effects of major rains from Harvey. But as things settle down in all the hurricane impacted areas, we should see significant new orders.”

In spite of those impacts, Smith expects “pretty good” business throughout the rest of the year.

“The big question in the near future seems to be when the stock market bear wakes up and how long he/she will stay up as well as how bad a mood it might be in,” he said.

Powell SlaughterPowell Slaughter | Senior Editor
PSlaughter@furnituretoday.com

I'm Powell Slaughter, senior editor at Furniture/Today. I returned to the publication in January 2015 after nine years of writing about furniture retail strategies and best practices at a monthly magazine focusing on home furnishings retail operations. Prior to that, I spent 10 years with F/T covering wood furniture, the last five of those as case goods editor. While I cover occasional, home entertainment and home office here, a major responsibility is expanding our attention to the logistics side of the industry. I hope my articles will encourage a dialogue with retailers, vendors, third-party logistics specialists and carriers. I’d love to hear your ideas, concerns and suggestions for smoother flow of material and goods.

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