9-7-2021 – COVID-19 surge feeds furniture headache

Posted on: September 7th, 2021 by admin

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September 7, 2021

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By Guy Lucas guylucas@newstopicnews.com

Sep 6, 2021

 

Just as furniture manufacturers began to make some inroads in reducing backlogged orders, surges in COVID-19 overseas, particularly in Asia, have further restricted some already tight supply chains, an industry observer reports.

 

New orders continue a year-long boom, with orders in June up 7% over June 2020 — which itself was a big boom month when consumers began a spending spree after the spring 2020 business lockdowns, according to the latest Furniture Insights report from the Smith Leonard consulting and accounting firm in High Point.

 

“We had thought that we would probably see some declines starting in June, which would not be bad, but might ‘feel’ not so good, but the results were positive instead,” the report said. “The results were not up for all, but some 66% of the participants reported increases over June 2020.”

 

That said, business was up so much in the second half of 2020 that Smith Leonard expects it will be hard to beat every month for the rest of the year.

 

Backlogged orders in June were 153% above June 2020’s levels, but shipments showed signs of picking up — before the highly contagious COVID-19 delta variant surged, the report said.

 

“As we write this, COVID cases are on the rise again and some countries have either shut down or have severely restricted production and shipping,” the report said. “Several of the Asian countries have seen significantly more cases, with Vietnam hit very hard. Ho Chi Minh City has significantly tightened their restriction, which has yielded significant reductions in production.”

 

The increase in COVID-19 cases in the U.S. also appeared to weaken consumer confidence, at least in the short term, the report said.

 

“Spending intentions for homes, autos, and major appliances all cooled somewhat; however, the percentage of consumers intending to take a vacation in the next six months continued to climb,” it said. “While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead.”

 

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