According to Smith Leonard's latest Furniture Insight report, new orders in June decreased by 6% in US dollars compared to the same period in 2023, marking the third decline in the past 13 months and the second consecutive month of decline.

Orders were down for around two-thirds of survey participants. Compared with May, orders were down 8%. Year to date, orders are up 3% compared with 2023, although that spread has narrowed significantly with the past two months of declines, Smith Leonard said.

Shipments in June were down 8% from last year but flat from May. Shipments were down for around 80% of survey participants compared with last year. They’re down 9% year to date. Backlogs were down 6% from last June and down 2% from May.

Receivable levels were down 7% from last June and down 1% from May. Inventories were down 16% from last June and are even from May.

The numbers of factory and warehouse employees were down 6% from last June and down 3% from May. Year to date, payroll expense is down 7%.


Image from  Furniture Insights@

“June 2024 marked the second straight month in which both new orders and shipments declined over the comparable prior year month for the companies in our survey,” said Mark Laferriere, Smith Leonard assurance partner. “This is in line with the 6% average decline in revenues reported by a representative group of the industry’s public companies in their latest quarterly filings.

“As stated before, the national economic indicators continue to be ‘mixed’ in July/August 2024. Specifically, consumer confidence inched up overall and the housing sales showed some signs of life compared to prior periods, not to mention a relatively positive earnings report from Home Depot. However, consumers are still concerned with the overall labor market in light of recent unemployment data and consumer debt remains high, which is a factor for certain sectors of the industry.

“There continue to be indications that interest rate cuts are coming, with many expecting that to occur at the Fed’s next meeting in mid- September. However, it could be next year before the full effect of those trickles down to the industry.”

Laferriere concluded by saying that retailers were cautiously optimistic about the Labor Day weekend, which should “provide some signal as to which way the industry is headed for the remainder of the year.”

Source: smith-leonard.com