August saw the largest increase of the year in new home furnishings orders, according to the latest Smith Leonard monthly survey of manufacturers and distributors.
The findings reinforce the recently released results of a third-quarter sampling of furniture retailers by Piper Sandler and the Home Furnishings Association.
[Furniture retailers expect continuing surge in sales, survey finds]
Smith Leonard, a High Point, N.C., accounting and consulting firm, said its respondents reported a 51 percent jump in August orders over the same month in 2019. That followed increases of 30 percent and 39 percent in June and July, respectively.
But, also echoing Piper Sandler-HFA, Smith Leonard noted: “Backlogs were up again in August, rising 19 percent from July to a 102 percent increase over August 2019. As we said before, backlogs are getting into a territory that is not good, and we continue to hear that they have grown even more since August.”
Domestic production and imports lagging
Smith Leonard added: “Shipments were up 3 percent over August 2019 as participants are having a hard time either ramping up domestic production or importers are having trouble ramping up production overseas as well as getting containers to flow. Year to date, shipments remain 11 percent below last year, but down from a 14 percent decline reported last month.”
The firm blamed labor shortages for at least part of the domestic production troubles:
“The number of factory and warehouse employees continues to be an issue, or rather the lack of finding factory and warehouse employees. We are hearing that, especially in North Carolina and Virginia, but also hear that from some others as well. The government programs hurt hiring and, even with those cut back, it has been hard to find enough people, who were already scarce, to fill the need for more workers due to the increased demand.”
Like Piper Sandler-HFA, Smith Leonard found evidence of continued strong demand:
Continued furniture sales growth is forecast
“After three difficult months of significant negative growth in orders compared to 2019 results by month, our survey has shown three straight months of very significant increases in orders, and from all of our conversations, we expect our survey to continue to show significant growth in September and October and even into November.
“The High Point October Market was certainly different. As expected, attendance was off significantly. The stretched-out days seemed to have accomplished the objective of keeping large crowds down. And as difficult as it was to only see a smaller number of customers each day, it appears that most buyers that made the effort to come were very serious, wrote orders, and did little tire kicking. The main objective seemed to be getting orders to exhibitors in hopes of getting product sooner than later.”
Retailers responding to the Piper Sandler-HFA survey said, on average, they expect furniture sales to increase by 15 percent during the fourth quarter. They also expressed concerns about supply chain delays.
[Experts offer retailers strategies to cope with weakened supply chain]
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