by FMCA’s 2nd-half 2026 survey reveals the payment pressures developing beneath improving furniture industry activity
HIGH POINT — The furniture industry entered the second half of 2026 with encouraging order activity — and a more complicated picture of how those sales are translating into cash.
Smith Leonard’s September Furniture Insights reported July new orders up 9% year over year, shipments up 8% and backlogs up 12% among participating manufacturers and distributors.
The Furniture Manufacturers Credit Association’s Member Credit Risk Pulse looks at another dimension of the same business: how retailers are managing payments to suppliers, where those patterns are changing and what the shifts may signal about financial stress. Fifty-three percent of respondents said customer payment performance had worsened over the preceding six months; 37% saw no meaningful change.
The contrast is not evidence of an industrywide credit breakdown. It suggests that improving business activity and pressure on individual retailers can coexist — particularly when suppliers are carrying the receivables behind those sales.
Among 30 credit professionals at home furnishings suppliers and factoring firms, 67% reported seeing slower payments more frequently, 57% cited reduced communication and 43% noted broken payment promises. Sixty percent said their companies had become more selective in evaluating or extending credit.
The economic backdrop helps explain the unevenness. Housing turnover remains subdued, consumer confidence weakened in September, and tariffs, freight and other operating costs put pressure on margins. General economic uncertainty led respondents’ outside concerns. One member described the market divide plainly: “High-end customers are spending; the middle market is not.” Stronger orders, in other words, do not guarantee stronger cash flow at every retailer.
The pressure is apparent in who gets paid. “We are seeing some customers only paying when they need to pick up a sold order,” one member reported. A retailer may pay the supplier needed to release merchandise while leaving others waiting — the familiar “robbing Peter to pay Paul” pattern, with vendor credit helping bridge a cash shortage.
Another respondent observed “a noticeable delay in nonessential invoice payments” as buyers stretched cash flow. A third described vendor credit as “interest-free bridge financing” through disputes and delayed approvals. Others pointed to partial remittances, unexpected deductions and invoice changes at the payment deadline. An isolated delay may have a straightforward explanation.
A sudden change in established behavior deserves attention.
Those differences may not immediately appear in broad industry statistics or general commercial credit reports. As one member put it, “We’ve always paid close attention to pay history, not just with us, but with all suppliers.” Historical, factual trade-payment information— including experience reflected in FMCA’s Credit Interchange Reports — offers another perspective alongside financial statements and a supplier’s own records. Such information is shared under antitrust safeguards; each company makes its own independent credit, shipment and collection decisions.
The survey is a pulse, not a statistically representative measure of the entire industry. Its 30 anonymous responses, collected Aug. 21-Sept. 16, nevertheless provide a timely look at what participating credit professionals are encountering.
A bankruptcy filing or shuttered storefront may be the public ending of a retailer’s difficulties, not the first warning. Earlier signs are quieter: a payment made only to release the next order, an unanswered call, or a dispute raised just as an invoice comes due.
That is the tension in the second-half 2026 credit outlook: Furniture orders may be recovering even as some retailers struggle to meet obligations. For suppliers, the most expensive assumption may be that an improving order book means every customer’s ability to pay has improved with it.
David R. Johnston is vice president and general manager of FMCA, which has served home furnishings and accessories suppliers and factoring firms since 1961.
