HIGH POINT – New orders for furniture from dealers kept climbing in August, up 51% compared with the same month last year. That follows 39% and 30% increases, respectively in July and June, as the release of pent-up demand kept retail business soaring.

That’s according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from accounting and consulting firm Smith Leonard.

“The increase, while a bit higher than we expected, was not really out of line from most of the conversations we had been hearing,” said Smith Leonard Partner Ken Smith in the survey report. “Increased new order levels were reported by approximately 88% of the participants. With the increased orders for the month of August, year-to-date new orders were 6% higher than the same period in 2019.”

While year-to-date orders overall are up, it’s not across the board, with just over a third of survey participants reporting increases through August.

August shipments were up 3% compared with August 2019, when they were off 6% from the previous year. Some 59% of surveyed companies saw shipments rise in August. Year-to-date shipments were down 11% but improved from the 14% YTD decrease in July.

“The increase in shipments though has not caught up with the order levels,” Smith noted. “Shipments were down for some 84% of the participants as production has not been able to catch up with orders, due to the difficulty in bringing back workers and well as getting imports shipped from primarily Asia.

Backlogs are a concern, up 19% over July levels and up 102% compared with August 2019. All survey participants reported increases. “Clearly, they are reaching levels that are too high but from what we hear, they have continued to rise after August,” Smith said.

August receivables fell 6% from August 2019, comparing very favorably to the YTD shipment decline of 11%. “Receivables were up 13% from July levels but that compared favorably with the 18% increase in shipments from July,” Smith said.

Inventory levels rose 1% in August from July and 10% from August 2019. July inventories were also down 10% from July 2019.

“The decline in inventories related to shipments going out faster than inventory could be made or brought into warehouses,” Smith noted. “Once again, those with finished goods in stock were able to ship as fast as they could due to need for inventory at the retail level.”

Smith said that factory and warehouse employment still doesn’t reflect current business conditions since manufacturers especially couldn’t “on board employees as quickly as they would have liked to as it was hard to get many employees back to work after taking government subsidies for several months.”

The number of employees rose 1% from July but was still down 7% from August 2019 levels. Factory and warehouse payrolls were up 15% from July but some of that related to the July shutdown for some. They remained 8% below August 2019, similar to the decline in employees.

In summary, Smith said the furniture industry is booming while other sectors continue to struggle.

“After three difficult months of significant negative growth in orders compared with 2019 results by month, our survey has shown three straight months of very significant increases in orders, and from all of our conversations, we expect our survey to continue to show significant growth in September and October and even into November,” he said, noting that the altered format of October High Point Market seemed to have accomplished the objective of keeping large crowds down.

“And as difficult as it was to only see a smaller number of customers each day, it appears that most buyers that made the effort to come, were very serious, wrote orders and did little tire kicking,” Smith said. “The main objective seemed to be getting orders to exhibitors in hopes of getting product sooner than later.”

In addition, Premarket was totally different than ever before with many exhibitors showing that had not done so before.

“So overall, other than some boredom on the part of some of the exhibitors, the market seemed to be good,” he continued. “We also heard that many buyers were just so glad to get back to having a market after missing April all together.”

The post Furniture Insights: Orders keep soaring in August appeared first on Furniture Today.

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