HIGH POINT, N.C. - New orders for residential furniture dipped 1% in January compared to 2023 figures, ending an eight-month streak of year-over-year growth, according to the latest issue of Furniture Insights. Approximately half of the participants reported increased orders in January compared to a year ago. 

Compared to December 2023 however, new orders were up 7%, said Mark Laferriere. assurance partner at Smith Leonard, which produces the monthly report.  

Likewise, January shipments were up 2% over December, but down 13% from January 2023, according to the analyst, with approximately three-fourths of the participants reporting a decline. "So despite recent improvement in new orders overall, trends continue to be affected by many companies shipping from their historically high backlogs through much of 2022 into early 2023. And with month-over-month orders declining and shipments up slightly, January 2024 backlogs were down 1% from December 2023 and down 27% compared to January 2023," Laferriere said.

Receivable levels were up 6% compared to December 2023, "which is likely a function of timing around the holidays," but down 12% in the year-over-year comparison with January 2023, he said, "which is materially in line with the decline in shipments."

Inventories were again down slightly, dropping 1%, from December 2023 and down 28% compared to January 2023, "indicating that companies have substantially adjusted levels to match current operations."

On a seasonally adjusted basis, sales at furniture and home furnishings stores in February were down 1.1% from January, and down 10.1% compared to February 2023 figures.

"Consumer sentiment related to the current economic environment remained largely unchanged from the prior month. And despite diminishing concerns about inflation and the likelihood of a widespread recession, the general outlook for the remainder of the year has deteriorated due to concerns about future business conditions, jobs, and the political environment, among other things. Some of these negative sentiments seem to be playing into what we’re seeing with new order trends in our monthly year-over-year stats recently," Laferriere said.

He added, "But at the same time, the housing market continues to show signs of life despite the elevated interest rate environment. Perhaps buyers have finally accepted this new normal and gotten on with life. Hopefully this activity, along with the expected interest rate cuts from the Fed in the second half of the year, will spur additional housing and furniture sales."