HIGH POINT, N.C. - Although new residential furniture orders rose by double digits in June compared to 2022 figures, "the June results were not as rosy as the results may appear," said Ken Smith, managing partner at Smith Leonard, which produces the monthly Furniture Insights.

"New orders in June 2023 were up 23% over June 2022, which at first glance, sounds like things were picking up. But looking back to June 2022, that survey indicated that new orders were actually down some 39% from June 2021," he added.

Year to date, new orders were down 8% compared to the same period in 2022, with roughly 71% of participants down for the year to date, according to the latest issue of Furniture Insights.

June shipments were down 28% from June 2022; conversely the 2022 figures were up 10% over June 2021, the analyst noted. For the month, shipments were down for 74% of the participants.Year to date, shipments were down 17% with just over 70% of the participants reporting lower shipments, according to Smith Leonard.

Backlogs were up slightly as orders in June were slightly higher than shipments in dollars but were down 58% from June 2022, compared to a decrease of 61% reported last month.

Receivable levels dropped 36% from June 2022, but were up 1% from May, in line with the 1% increase in shipments from May to June, the report said. Inventories were down 4% from May and down 26% from June 2022 "It appears that inventories for many are getting back in line with current business conditions."

On an adjusted basis, July sales at furniture and home furnishing stores were down 6.3% from 2022 figures for the month. "Sales at these stores were down 3.8% year to date. But remember that sales at these stores were up 15.6% in July 2021 over July 2020 and about even in 2022 with 2021," Smith noted.

In summarizing the data, he said, "We were trying to determine what should be said about the current survey and tie in what we are currently hearing about business in general, then try to put that together with what the near-term future might look like. We hear things like, retail seems to be doing OK and have good (maybe not high) expectations for the rest of the year. We also think that 2024 could be our next base year since we tried using 2019, but that has not worked very well on an overall basis due to fluctuations in pricing."

Smith added, "But when we look out to see ahead, we say, well that depends on, can we keep inflation under control and maybe even get a little back, especially with fuel prices and some food prices. Then we say, what will happen in the political world with the presidential races and what about the economic problems in China? Will the expected recession have a soft landing or have we already had it? What is happening in the banking world, especially for the furniture world? The list goes on and on."

He continued, "As we continue to say, the industry is not one industry but a whole bunch of individual companies under one large umbrella. Each has its own niche and its own financing needs, its own style of management and sell to different parts of the industry through different channels at different price points.

"But the folks in the industry, as a whole, figure a way to work through the murky waters. Not all, as evidenced by some of the closings lately, but when it is all said and done, we are not sure that the failures were all indicative of a bad industry. We do believe that we will get back to the typical industry ways of the more normal ups and a few downs. There probably will be more failures as there always have been, but people still need furniture. As we always say, you don’t have to sell all the furniture in the world. You just have to sell your share at margins you need. You just have to figure out what your share has to be."