June home furniture orders continue their growth streak: Smith Leonard

HIGH POINT, NC – New orders for residential furniture continue to rise, up 7% in June from 2020. This is particularly noticeable given that June 2020 was up 30% from 2019 and marks 13 consecutive months of growth in year after year, as Smith Leonard reported. in the latest issue of Furniture Insights. The increase in new orders was reported by about 66% of home furniture manufacturers and distributors participating in the monthly survey.

“Since the start of the year, new orders are up 51% in the first half of 2020 and up for 94% of participants. For comparison, new orders over the first 6 months of 2021 are up 37% over the first 6 months of 2019. We continue to believe that comparisons with 2020 for the rest of this year will be hard to beat ”, said Ken Smith, managing partner at Smith Leonard.

Shipments were up 38% from June 2020 figures for about 81% of survey respondents, according to August Furniture Insights. From the start of the year through June, shipments increased by 42% over the 2020 period, with around 91% of participants reporting an increase.

However, shipments continue to be hampered by supply shortages. “Freight issues are a major issue, with container shortages continuing to drive big price increases, if you can even get them,” Smith said. “Some blame some of the big retailers for downing the containers. Labor issues continue. We have read about how many people are simply not looking for a job. Opportunity to start their own small business. Some have decided to just retire, and some point to the cost of child care, which makes it better to stay home. Others have highlighted the fear of contracting COVID-19. “

Order books continued to increase, with dollar orders exceeding the dollar value of shipments. Order books were 153% higher in June than in June 2020, according to the analyst firm.

Receivables levels are up 40% from June 2020 figures, which is in line with the 38% increase in shipments for the month and 42% year-to-date. “Receivables levels continue to be in good shape and from conversations, aging continues to look good as dealers pay to make sure their orders aren’t delayed,” Smith said.

Inventories rose 48% in June, a 3% increase from July levels. “As inventory levels have increased, some manufacturers say they’ve built products to keep factories busy but aren’t always able to ship due to foam and other shortages. foam seems to be improving, but other materials such as those with the steel involved are still problematic, ”Smith noted.

Furniture and home furnishings store sales in July, on an adjusted basis, increased 15.6% from July 2020 and 38.5% from same period a year ago .

“Expectations are that the global economy will continue to grow, albeit at a slower pace, but expectations are still over 4% through 2022,” Smith said. “We believe the furniture industry should continue to expand as well, with shipments continuing to grow as backlogs decrease. This would indicate that volume does not appear to be the issue. Profitability may be the issue as costs rise faster. that price increases can be implemented It is difficult to anticipate in three months, when the products will be produced, on the basis of the price lists published today.

He added: “These issues are big and difficult to deal with when business” feels “really good.” Hopefully by the October market and the next fall season, COVID cases will follow a downward trend. “

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