New orders down 19% in April! Shipments down 28%! The US furniture market continues to decline!

Home micro News In the latest edition of furniture Insights, released by statistical consulting firm Smith Leonard, data shows: The recent performance of the US furniture market remains sluggish, and the volume of new residential furniture orders continues to decline, with new orders falling by 16% month-on-month and 19% year-on-year in April 2023. Eighty-four percent of respondents reported a decrease in purchase orders."The U.S. furniture business continued to contract in April, and hopefully we'll see some pickup in the May results," Smith Leonard partner Ken Smith said.

The report also shows that furniture shipments in April 2023 were down 28% year-over-year and 14% year-over-year in the first four months.

"Inventory pressure eased as shipments exceeded new orders, with backlog down 8 percent month-on-month and 64 percent year-over-year from the extremely high inventory levels of April last year," Smith said.

In addition, the level of accounts receivable was in line with monthly shipments, down 31 percent. Inventories fell 5% in March and are 12% lower than a year ago. How much inventory will be needed in the future is uncertain because of declining business and supply shortages.

Ken Smith added: "The number of factory and warehouse workers fell again. We continue to believe that attrition is addressing some of the decline in performance and underperformance, but the business needs to pick up soon to avoid more severe layoffs. In some recent meetings with industry leaders, we've heard that at least in some areas there may have been some recent pick-up. At the retail level, some companies still have too much inventory, and customers are not buying very much, but overall, it's a positive feedback."

On an adjusted basis, sales at furniture and home goods stores fell 6.4 percent in May from a year earlier, but were up slightly from April. In the first five months of the year so far, sales at those stores were down 2.9% from a year earlier.

Ken Smith said: "Improving consumer confidence will drive a recovery in new home furniture. Although the report notes that domestic travel momentum is slowing, the beach was still crowded when we went on a family trip a few weeks ago. While it's true that restaurant prices have gone up significantly, we're starting to hear that prices are leveling off in the near term. It is also good news that the prices of raw materials related to manufacturing have not risen much. And delivery times seem to be getting shorter for most products, which also helps consumers make purchase decisions."