Furniture Insights: November Orders Rise
February 1, 2010After ending a two-year decline in October, new retailer orders for furniture started climbing again in November, up 10 percent over November 2008, according to the latest Furniture Insights survey of furniture manufacturers and distributors from the High Point accounting and consulting firm Smith Leonard.
Flat results in October had marked the first month since October 2007 where new orders were not lower than the previous year.
The industry still has some catching up to do--November 2008 orders were off 23 percent from November 2007--but it's the second month in a row of now decline.
Fifty-one percent of the participants reported increased orders in November, up from 41 percent in October, 33 percent in September and 20 percent in August.
That is a good trend. Year-to-date, new orders were down 14 percent compared to the same period a year ago, down from 16 percent last month. Last year at this time, new orders were down 13 percent year-to-date.
Shipments in November were off 1 percent compared to November 2008, the first month that shipments were off less than 10 percent since June 2008. Shipments were 4 percent higher than October, but obviously have not yet caught up with the increase in orders. November 2008 shipments were 21 percent lower than November 2007 shipments.
Backlogs were 6 percent higher than October, as orders exceeded shipments. Backlogs were 7 percent higher than November 2008 after a 1 percent increase
last month, following many months of significant declines in backlogs.
Receivable levels were 14 percent lower than November 2008 compared to a 20 percent decline last month.
"We mentioned last month that the 20 percent decline might have related to timing as it appeared a bit out of line," Smith Leonard Managing Partner Ken Smith said in the report. "The 14 percent decline is in line with year-to-date shipments decline of 17 percent."
Inventories fell 1 percent from October 2009 and were down 27 percent from November 2008, versus a 26 percent decline last month.
"The decrease in inventories is likely the result of most companies working hard to convert inventories to cash, the decline in volumes, as well as more direct imported products included in sales that never hit inventory," Smith said.
Factory and warehouse employment was even with October and down 11 percent from last November. November 2008 employees were down 17 percent from November 2007. Payrolls were down 3 percent compared to last November, when they were down 22 percent compared to November 2008. Year-to-date, payrolls were 18 percent lower than the same period a year ago. Year-to-date payrolls in 2008 were 14 percent lower than the same period in 2007.
