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Smith Leonard survey finds continued growth in new furniture orders

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December capped a strong year for new furniture orders, Smith Leonard PLLC reports. 

A 7 percent increase “was the 12th straight month of positive comparison to the previous year. This led to an increase of 6 percent in new orders for the year,” the High Point, N.C., accounting and business consulting firm said in its latest Furniture Insights newsletter. 

Key Monthly Indicators via Smith Leonard PLLC
Key Monthly Indicators via Smith Leonard PLLC

In his executive summary, partner Ken Smith added a caveat: “That said, though, only 45 percent of the (survey) participants reported increased orders in December compared to December a year ago. So, it was a month of very good results for some but not so great for all.” 

For the year, new orders exceeded shipments, resulting in a backlog in December that was 13 percent higher than the previous year. “For all of 2018, shipments were up 3 percent over the 2017 year. For the year, 66 percent of the participants reported increased shipments,” the report said. 

Percent Increase/Decrease from Prior Year via Smith Leonard PLLC
Percent Increase/Decrease from Prior Year via Smith Leonard PLLC

The authors added these comments: 

“The increase in new orders was a bit surprising for December based on our conversations. With only 45 percent reporting increases, the increase was driven by some large increases. We wonder if maybe the tariff issues had something to do with the pickup in orders in December. For the year, the results were pretty good posting a 6 percent gain in orders following a 4 percent increase (in 2017). 

“Both consumer confidence reports were positive after recent declines. Both these reports and the Economic Indicators reports noted that the economy growth is slowing and is expected to taper off in 2019. The initial GDP report for the fourth quarter of 2018 was showing growth at 2.6 percent down from 3.4 percent in the 3rd quarter. But the 2 plus percent they project for 2019 is not all bad. Growing at the very fast rates over long periods makes it difficult to find workers with the right skillsets. 

“The delay in tariffs (till when) is helpful but makes it hard to plan what to do. We would like to think that sometime soon there is a timetable. Lots of production has been moved around with a lot of trouble and some more adjusting may be needed. It would be nice to know if and when more adjustments may be needed.” 

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