12-30-2020 – Furniture orders continue surge

Posted on: December 31st, 2020 by admin

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December 30, 2020

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By Guy Lucas guylucas@newstopicnews.com

Dec 30, 2020 Updated 19 hrs ago

 

Furniture orders continue pouring in to manufacturers faster than they can be filled, a consulting firm reports.

 

Through October, new orders were running 14% percent over 2019’s level because of five consecutive months of significant increases, according to the latest Furniture Insights report from Smith Leonard, an accounting and consulting firm based in High Point.

 

“We have continued to hear strong order performance from many we have talked to recently, though we are hearing that the size of the increases has slowed,” the authors wrote.

 

Recent declines in consumer confidence don’t seem to be affecting furniture, the report said.

 

“Travel and entertainment declines are part of the reason” for the overall decline in consumer confidence, it said. “But as we have said before, the decline in these areas has put more money in consumers’ pockets, and they seem to be spending it on their homes, including furniture.”

 

The industry had a three-month period of significant declines when the COVID-19 pandemic began, but the rebound began in a big way in June, when orders were up 30% from June 2019, the report said. Orders in July were 39% higher than in July 2019; August was 51% higher; September was up 43%; and October’s orders were 40% higher than the same month in 2019.

 

Getting products out to those who ordered them continues to be the problem, the report said.

 

“Backlogs continued to rise as orders once again surpassed shipments. Backlogs at the end of October were 141% higher than October 2019, again causing issues at the retail level,” it said.

 

Two problems contributing to the backlogs are slow imports from Asia and a labor shortage in U.S. factories and warehouses, the report said.

 

“Shipments were up 8% over October 2019 after a 4% increase in September. It appears that imported goods are starting to flow, as well as shortages of raw materials for domestic manufacturers has started to diminish, though prices of certain materials seem to be rising due to the shortages,” the report said. “Year to date, shipments remained 8% below the pace of the same period last year.”

 

Business in 2021 probably won’t remain as strong as it has been in recent months, but continued good news is likely, the report said.

 

“We do expect that significant growth to slow somewhat in the next few months,” it said, “but most whom we have talked with seem to believe results will stay positive at least through the first part of the year.”

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