Industry Outlook  



US Furniture Insights

Smith Leonard presents the results of January, February 2013

By Smith Leonard

“We continue to believe that the residential furniture industry will benefit from the improved housing situation. New construction will take a bit longer tosee the results, as the homes have to be built and then sold before any furniture will be bought…”

The February results of our recent survey of residential furniture manufacturers and distributors were pretty much in line with our expectations. New orders were off 3 percent from February a year ago while shipments fell 2 percent. Year-to-date for the two months, new orders were up 2 percent and shipments were up 4 percent.

With the dollar value of orders exceeding shipments for the month, backlogs increased 5 percent, but dropped 1 percent from a year ago.

Receivable levels seemed pretty much in line for both the monthly and prior year comparisons. Inventories appear a bit high, but have moved a bit in the right direction. Inventories built up last fall when we all thought business was continuing to improve, but then business softened after inventories were built.

The increase in the number of factory and warehouse employees seems in line with increased business. Payrolls are up 3 percent year-to-date but we think part of that relates to some raises that were given last year after, in many cases, no raises in some time.

Housing continues to improve. Although shortages have occurred in existing homes in certain areas, causing growth to be slowed, the overall picture continues to improve.

We continue to believe that the residential furniture industry will benefit from the improved housing situation. New construction will take a bit longer to see the results, as the homes have to be built and then sold before any furniture will be bought, but we believe existing home sales will help the industry until the new homes can have some more effect.

We had pretty much heard in conversations prior to Market that business was “somewhat all over the place.” When we described it as maybe like a kids roller coaster, most tended to agree. While some were outside the norm, it just seemed that business was good one day, soft the next, maybe non-existent one day, then good again the next. The key has been trying to string together a good week or two. So as we rode into the High Point Market, our expectations were a bit low. We know all exhibitors are excited with new product when they come to town, but too many times when it is all over, the excitement goes away.

Well, certainly not this Market. At least not in the circles we covered. We haven’t seen this much enthusiasm in quite some time, even late in the Market. We talked to quite a few exhibitors on Monday and Tuesday and all were extremely pleased.

We know that many do not write a lot of orders at Market, but some we talked to do write. We heard phrases on Monday and Tuesday like “Best Market in 5 years” and “Best Market since 2006 and 2007.” We even heard one say “Best Market ever,” though we imagine he had forgotten or didn’t know what really good markets used to be like.

Let’s keep our fingers crossed that this momentum carries forward. We know that many dealers wanted to freshen their floors. Hopefully as the housing sales demand more furniture, the new product will entice even more sales.



The original report appears in full in the monthly newsletter – Furniture Insights, which is supplied by Smith Leonard PLCC. It tracks key data; and annually produces key operating statistics and analysis for manufacturers and distributors.

Smith Leonard PLCC are active members of the American Home Furnishings Alliance and work with the National Home Furnishings Association, Southern Home Furnishings Association, the Furniture Manufacturers Credit Association, Piedmont Triad Partnership Furniture Council, Women in the Home Industry Today, and the High Point Market Authority.