HIGH POINT, N.C. - New residential furniture orders rebounded in May with a double-digit rise over April figures as well as May 2022 figures, according to the latest issue of Furniture Insights produced by Smith Leonard.

"As we expected, the results of our survey for May continued to indicate slow business for the most part. While orders in May were up 15% over May 2022, a good portion of that increase appeared to be caused by certain larger retailers making large commitments for certain parts for the rest of the year. But 64% of the participants did post increases in orders so that was a good sign," said Ken Smith, managing partner at Smith Leonard.

New furniture orders also rose 24% over April 2023 figures, according to the latest issue of Furniture Insights. Year-to-date however, new orders were down 13% compared to a year ago, the accounting and consulting firm noted, with 78% of the participants reporting a decline.

May shipments also were down 18% from 2022 figures, and down 15% year-to-date. "The year-to-date numbers were a bit more mixed as 63% reported a decrease in year-to-date shipments," Smith said in the July Furniture Insights.

Backlogs were down slightly from April figures, and down 61% from 2022. "Backlogs seem to be back to more normal levels now considering the built-in price increases and new order rates," he added.

Receivables increased 2% in May over April as shipments were also up over April, though the difference could be due to timing issues, the analyst said. "From May of 2022, receivables were down 30% with shipments only off 18%. Again, we believe that is likely a timing issue."

Inventories were down 23% from last year and down 5% from April. "The 23% decline from last year compared to a 12% decline reported last month. From what we are hearing, and considering price increases, it appears that inventory levels at the manufacturers and distributors are at least somewhat in line with current business conditions," he added.

On an adjusted basis, sales at furniture and home furnishings stores in June were up 1.4% over May but down 4.6% compared to June 2022. They were down 3.2% year to date.

"To us, it seems difficult for the overall economy to really know what the expectations should be. Consumer confidence is up, though that report still mentions recession in spite of the employment numbers being really good. The second quarter GDP report was positive and back in a more normal range, yet the Leading Economic Indicators report predicts we are in a recession beginning third quarter through first quarter 2024. The consumer price index keeps retreating in spite of gas prices rising, though we wonder what the real situation is when the price of a $10 item goes up 8% creating 8% inflation. Then if inflation tames to 3%, doesn’t that really mean the $10 item went to $10.80 and then at 3% the item would be $11.12."

Smith continued, "Anyway, we are not economists, so we leave it up to you to know what all this means to your business. As we have hammered the point so many times, this is not one industry but a whole bunch of different industries rolled into one. Each of you, in effect, has your own. It is great where the total industry is rising, but when the tables turn as they seem to have done recently, you have to look at your own results in comparison to what our numbers say, then take a realistic look at why you are better or worse, and why.

"Let’s hope that if it is a recession, it is one that we hardly notice as we hope to return to more normal times soon."