5-3-2021 – Furniture order gains continue

Posted on: May 4th, 2021 by admin

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May 3, 2021

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By Guy Lucas guylucas@newstopicnews.com

Apr 30, 2021 Updated Apr 30, 2021

 

Furniture companies finally managed to make a significant increase in February in shipping product to satisfy orders — but it still lagged behind robust growth in orders, so the industry’s staggering backlog of orders kept growing, a new report said.

 

Shipments in February were 18% higher than they were a year ago, and four-fifths of all companies responding to a survey had increased shipments, according to the latest Furniture Insights report from the Smith Leonard accounting and consulting firm, based in High Point.

 

But new orders were up 34% from a year earlier, so backlogs were 5% higher than they were a month earlier and 184% higher than they were in February 2020, the report said.

 

“Who would have thought that we would ever complain that backlogs could be too high, but in many cases, there is fear that orders may start being cancelled,” the report said. “The one thing that is probably helping with customer patience is that the same thing is happening with many other products, such as appliances, glass and other household products.”

 

February was the ninth consecutive month the industry saw double-digit increases in orders from the previous year’s level.

 

And while surging consumer confidence — a University of Michigan survey found half of all consumers, the highest level ever recorded, expect further declines in unemployment, and most express greater confidence in their future job and income prospects — probably means a continuing high level of orders, February is the last month that a direct comparison with the previous year will be meaningful for a while because March 2020 was the beginning of COVID-19-related business shutdowns, the report said.

 

Furniture orders crashed when the shutdowns happened but rebounded strongly by June and have not let up.

 

“It will likely be June or later before we start seeing meaningful comparisons, and even then, the surge in orders that we have seen since June will probably make even more difficult comparisons,” the report said.

 

Across the industry, problems with supply chains, escalating supply costs and labor shortages continue.

 

“We have had several conversations with industry executives that almost always end up with frustrations of how good business is in terms of orders coming and yet how difficult it is to either not be able to get foam or workers, or deal with significant price increases when prices were quoted before the material cost increases came into effect. Or orders are great but cannot get product out of Asia. Or the cost of containers, if you can get them, have quadrupled or more,” the report said. “It seems that no one would have thought that, for once, business in the furniture industry could be this good with consumer demand this high, yet so many problems have developed to make it hard to appreciate how good business is.”

 

Despite the problems, though, optimism heading toward the spring High Point Market in June appears to be high, it said.

 

“All we hear from Premarket (which was April 25-27) is that business is brisk with attitudes very good. There appear to be lots of people here in High Point with lots of excitement over product,” the report said.

 

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