by HIGH POINT — Year-over-year furniture shipments rose a tepid 2% in October, while new orders fell 30% from October 2021, signaling a further slowdown in retail activity.
The figures were part of the latest Furniture Insights survey of residential furniture activity published by Smith Leonard.
According to the December report issued late last week, some 64% of participants in the survey reported an increase in October shipments versus last year, bringing the estimated total to $2.51 billion, from $2.46 billion in October 2021. Year to date, the report noted, shipments were up 5% to $29.1 billion, with some 70% of survey participants reporting increases over the 10-month period.
New orders, meanwhile, fell 30% to $1.92 billion, from $2.73 billion in October 2021, with some 88% of participants reporting a decline. Year to date, orders were down 29.5% to $22.45 billion, compared to $31.85 billion year to date in 2021.
October 2022 backlogs were almost reduced by half during the month of October, to $4.67 billion from 8.82 billion in October 2021.
“Backlogs in October fell 8% from September and are now down 47% from a year ago, as shipments are being made from backlogs and new orders are not keeping up,” the report said.
The report also noted that receivable levels were up 6% from last October and are “mostly in line with year-to-date shipment increases of 5%.”
“We are concerned with receivable levels as some of the dealers are seeing a big slowdown at retail,” the report said. “Holding orders when a customer is a bit behind will take some efforts on the part of credit managers to decide whom to let ride a bit.”
Inventories, the report said, were flat with September but up 47% from October 2021.
“Inventories were so low during the pandemic they needed to be built back up,” the report said. “The question is with business slowing, how much inventory is really needed. Inventory is such as major part of working capital; it can easily put a strain on finances.”
In addition, the report said that the number of factory and warehouse employees was fairly steady in October, and that payrolls were higher because of higher wages and employers paying more to attract new workers.
“Overall, until shipping settles down after working down backlogs, payrolls and employees should be OK,” the firm said. “When cuts are needed if this slowdown continues, some cuts at the bottom may not hurt that badly, even when it has been so hard to find good employees.”
