HIGH POINT, North Carolina – Although January saw a 12% decline in new residential furniture orders compared to 2021, they are still up 16% from 2020 figures.
“[E]Even with the 12% decline in overall orders in January 2022 comparisons to January 2021 results, some 55% of participants reported an increase in orders for the month,” noted Ken Smith, managing partner at Smith Leonard.
Shipments were down 3% from January 2021, but as with new orders, they were up 7% from 2020 figures, according to Furniture Insights from March. Arrears increased by 1% compared to December, which increases arrears by 43% compared to January 2021, the monthly report indicates that arrears for January 2021 increased by 177% compared to January 2020, so that backlogs continue to grow, albeit slightly, Smith said.
“Receivables levels continue to be in good shape and as we work with clients we see that in the agings,” he added. “Most customers are still up to date or very close. We know the PPP loan money has helped customers do that. We just hope the goods can be shipped as soon as possible. Inventory levels have been replenished mostly hopefully with the right mix of raw materials and/or end products.”
Receivables were up 6% from December but down 5% from January 2021. Inventories were up 4% from December 2021 and posted a 24% increase from a year ago. year.
“From what we can tell, most of our participants as well as others we speak with continue to see some growth, but clearly at more manageable levels. The problem seems to be putting enough holes in the backlogs. Lack of employees continues to be a real problem Add to that the ongoing issues with freight and other supply chain issues, these are difficult times for most to continue to provide good service to customers at the level wholesale as well as at the retail level,” said Smith.
Even so, sales at furniture and home furnishings stores were up 7.4% from February 2021 and 4.4% year-to-date on an adjusted basis, according to the report.
“Add significant inflation issues (i.e. price increases), unrest in Ukraine and Russia, more virus issues, especially in foreign countries, and it really makes things difficult We’ve said this before, but I’m not sure many would ever have believed that business could be this good from an order perspective, while being this difficult to manage,” Smith added.
“Despite the issues mentioned and not yet covered, consumer confidence remains at fairly high levels and most believe the US economy is still reasonably strong,” he said.