Decline in Factory Orders Slows in March
June 2, 2009
While factory orders and shipments declined in March on a year-to-year basis, the percentages are shrinking, and that's positive news, according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from the High Point accounting and consulting firm Smith Leonard.
New orders for March 2009 were 17 percent lower than March 2008. Year-to-date, new orders were 21 percent lower than the first quarter of 2008. This percentage was down from 22 percent last month (the fourth quarter of 2008 was down 26 percent). Orders in the first quarter of 2008 were 8 percent lower than the first quarter of 2007.
"While nothing to get too excited about, at least the decline fell below the 20 plus percentages we have been reporting," said Smith Leonard Managing Partner Ken Smith in the report on the survey.
Similar to orders, shipments were off 17 percent in March versus March 2008.
"One reason March 'felt' better was that March shipments were 10 percent higher than February, but that is somewhat affected by more days of shipping," Smith noted.
Backlogs fell 1 percent in March from February as shipments slightly exceeded orders. Year-to-date, backlogs are 21 percent lower than March of 2008. March 2008 backlogs were 10 percent lower than March 2007.
"Backlogs are the lowest we have seen in recent memory," Smith said.
Receivables were 20 percent lower than March 2008 levels, very much in line with the decline both in March and year-to-date shipments. Receivable levels were 4 percent lower than February in spite of the increase in shipments over February.
"Although we continue to hear that some retailers are stretching out payments, we have also noted that many manufacturers and distributors are holding shipments until credit lines are reasonable," Smith said.
Inventory levels were off 5 percent from February and were 11 percent lower than March 2008.
"It appears that many importers have been able to reduce the flow of goods from Asia and others," Smith said. "Most everyone we have talked with are really focused on turning inventory to cash. In addition, and we hope this is true, we believe that much of the blow out inventory, has been 'blown out.' This is a good thing."
March 2009 factory employees were 20 percent lower than March 2008 and off 2 percent from February 2009. Factory payrolls were off 24 percent from March 2008 and down 24 percent for the first quarter. The increase of 9 percent from February is likely the result of more working days in March versus February.
New orders for March 2009 were 17 percent lower than March 2008. Year-to-date, new orders were 21 percent lower than the first quarter of 2008. This percentage was down from 22 percent last month (the fourth quarter of 2008 was down 26 percent). Orders in the first quarter of 2008 were 8 percent lower than the first quarter of 2007.
"While nothing to get too excited about, at least the decline fell below the 20 plus percentages we have been reporting," said Smith Leonard Managing Partner Ken Smith in the report on the survey.
Similar to orders, shipments were off 17 percent in March versus March 2008.
"One reason March 'felt' better was that March shipments were 10 percent higher than February, but that is somewhat affected by more days of shipping," Smith noted.
Backlogs fell 1 percent in March from February as shipments slightly exceeded orders. Year-to-date, backlogs are 21 percent lower than March of 2008. March 2008 backlogs were 10 percent lower than March 2007.
"Backlogs are the lowest we have seen in recent memory," Smith said.
Receivables were 20 percent lower than March 2008 levels, very much in line with the decline both in March and year-to-date shipments. Receivable levels were 4 percent lower than February in spite of the increase in shipments over February.
"Although we continue to hear that some retailers are stretching out payments, we have also noted that many manufacturers and distributors are holding shipments until credit lines are reasonable," Smith said.
Inventory levels were off 5 percent from February and were 11 percent lower than March 2008.
"It appears that many importers have been able to reduce the flow of goods from Asia and others," Smith said. "Most everyone we have talked with are really focused on turning inventory to cash. In addition, and we hope this is true, we believe that much of the blow out inventory, has been 'blown out.' This is a good thing."
March 2009 factory employees were 20 percent lower than March 2008 and off 2 percent from February 2009. Factory payrolls were off 24 percent from March 2008 and down 24 percent for the first quarter. The increase of 9 percent from February is likely the result of more working days in March versus February.
