HIGH POINT, N.C. - New residential furniture orders continued to fall despite the recent High Point Market, down 19% in the April to April comparison, and down 16% from March 2023, according to the latest issue of Furniture Insights produced by Smith Leonard. Orders were down for 84% of the survey participants.

"The contraction of business continued in April, despite having the April market. We realize that it generally takes a while for market orders to come through. Hopefully, we may see some pick-up in the May results," said Ken Smith, managing partner at Smith Leonard.

Year to date, orders were down 19% compared to last year, the accounting and consulting firm noted, with more than 80% of the participants reporting the decline.

Shipments also continued to fall, down 28% in April compared to 2022, and down 14% for the year to date.  For the month, shipments dropped for 88% of the participants while the year-to-date decline was for only 60% of the participants. "With shipment dollars exceeding new order dollars, backlogs fell 8% from March and were down 64% from last April, when they were still at extremely high levels," Smith said in the June Furniture Insights.

"Receivable levels seem in line with the monthly shipments, declining 31% and inventories were 12% below last year after a 5% decline in March," Smith noted in the report. "It will take some time to determine what inventory levels need to be, due to the decline in business plus how much 'protection' is needed in the future due to supply shortages."

Although the number of factory and warehouse employees fell again, Smith said, "We continue to believe attrition is taking care of some of the decline as well as underperformers, but business needs to pick up soon to avoid more serious cuts."

He added, "There is some good news out there. In some recent talks with industry leaders, we are hearing that there may have been some uptick recently in at least some areas. We continue to hear that, at the retail level, some still have too much inventory and customers coming in is not as brisk as some might like it, but overall, there seems to be some positive feeling."

On an adjusted basis, sales at furniture and home furnishings stores in May were down 6.4% from May 2022 but were up slightly from April. Year to date, sales at these stores were down 2.9% from the same period a year ago.

"Things have been so difficult to compare, and we know that summertime usually has some slowdowns, but comments like 'business can be described as good, not great,' make us believe that many have been surprised that business has not fallen off like some expected it to do," Smith said.

He continued, "The increase in consumer confidence should be helpful. While the report noted that domestic travel may be slowing, you would never tell it by the crowds at the beaches a couple of weeks ago on our family trip. While prices at restaurants have certainly increased rather substantially, we are starting to hear that prices are leveling out. Even comments we heard about not many material price increases at the manufacturing level were good to hear. And lead times seem to have come down for most, which should help consumer decisions about buying."