Numbers are partly skewed by 37% decrease in new orders in July 2022 compared to July 2021
HIGH POINT — New furniture orders rose 28% in July from July 2022, according to the latest Furniture Insights report from Smith Leonard, although the numbers are likely skewed by a major drop in last year’s orders, the firm noted.
New orders totaled $2.32 billion in July, compared to $1.82 billion in July 2022, and were up for 71% of survey participants, which include manufacturers and importers. While up by double digits, the report noted that July 2022 orders were down 37% compared to July 2021, “so the 28% increase in July 2023 is not as good as it might seem.” It added that year to date, new orders totaled $15.2 billion, down 4% from the $15.8 billion reported the first seven months of 2022.
It noted that year-to-date orders in 2022 were down nearly 30% from 2021. “But once again, one must look at the previous year when orders were up 39% in 2021 over 2020, when part of 2020 was shut down due to Covid. As we have noted before, these comparisons are further affected by the price increases seen from 2020 up through much of 2022.” The firm noted that year-to-date orders were down for 63% of those surveyed.
“As we have said, comparisons today are difficult,” the report stated. “Just read the quarterly reports from the public companies and then compare the results back for the same periods to the last few years.”
Compared to the $2.54 billion of new orders in June, July orders were down 8.9%.
The report said that shipments for July 2023 totaled just over $2 billion, compared to $2.54 billion in July 2022, a 21% decrease. The report said shipments were down for 75% of those surveyed and also noted that shipments in July 2021 were up 21% from July 2020.
Year-to-date shipments totaled $16.9 billion, down 18% from the $20.6 billion reported the first seven months of 2022, down for 70% of survey participants. Last year, they were up 5% over 2021, and 2021 shipments were up 39% over 2020, the report said, adding that shipment results have largely been affected by backlogs built up during the pandemic.
The report said that backlogs continue to return to more normal levels — in July they totaled just over $3 billion, compared to $6.1 billion in July 2022. In June, backlogs totaled $2.9 billion.
“Backlogs actually increased a bit in July as the dollar amount of orders exceeded the dollar amount of shipments, but that may have been affected by short shipping in July due to most taking vacations over the Fourth of July,” Smith Leonard stated. “From many we have heard from, backlogs are back to more normal levels other than maybe some of the higher-end manufacturers.”
Other highlights of the report were as follows:
+ Receivable levels were down 34% from July 2022, “a bit more than the decline in shipments.” The report said some of the difference likely is affected by some participants who report their receivables net of deposits. Thus if their backlogs remain high, their receivable levels “may be understated compared to shipment volumes.” The report also noted that receivables were down 6% from June with shipments down 17%.
+ Inventory levels were up 3% over June but were 28% below July 2022. “The dollar amount of inventories seems to be more in line with current business levels. Since business has been so different in the last few years, there is still the question of ‘do the inventories have the right amount of the right items?’”
+ The number of factory and warehouse workers was down 1% from June and 8% from July a year ago. Payrolls, the report said, were down 14% from June — which was likely impacted by shutdowns in July — and were down 10% from July 2022. Year to date, payrolls were down 8% from the same period in 2022.