New orders for furniture from retailers fell 1% in February compared with the same month in 2015, according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from the High Point accounting and consulting firm Smith Leonard.

That was the survey’s first decline in orders reported since February 2014, and only the second decline in orders versus the previous year since March 2013.

The drop in orders in February put year-to-date results at about even with the previous year.

Shipments were up 3%, bringing year-to-date shipments through February to a 1% increase after a 1% decrease in January.

“While neither of these results were what everyone was looking for, they did seem to reflect much of what we have been hearing in that the first quarter seemed a bit soft,” said Smith Leonard Managing Partner Ken Smith in the survey report. “But, we need to keep in mind that through February 2015, orders were up year-to-date 7% and shipments were up 11%, so we were comparing to some pretty healthy increases in the prior year.”

Backlogs held about even in February, with orders and shipments about the same in dollars.

“Receivable levels were in very good shape based on shipment levels, while inventories inched down a bit, but still showing a 5% increase over last year,” Smith said. “While a bit high, they do not seem too far out of line.”

Factory and warehouse employees held steady at a 1% increase over February 2015, and year-to-date payrolls fell back in line, showing a 2% increase.

“We must have had some timing issues around payrolls last month,” Smith noted.

He also had thoughts on last month’s High Point Market.

“Of course, the talk of market typically turns to attendance,” Smith wrote in the report. “Based on our travels from Thursday to Wednesday, we heard it all. From traffic is really off (but the quality of who was here was good from some) to traffic was about equal, to traffic was up in the showrooms. And we believed all of those we heard, as we did pay attention to clients who tell us the truth.”

The importance of market attendance depends upon vendors’ customer base, he noted: “If you sell primarily to the top 100, then you are typically flat, with the exception of maybe a few smaller representatives from a given company. If you sell high-end European leather, etc. then your April market may be off from October due to the Milan show. If you had great new collections or products and did your homework, your traffic was probably up and we know that was true in several showrooms we visited late in market.”

In summary, Smith said that despite choppy business at retail, the industry should grow this year, albeit not at the pace of the past couple of years.

“Let’s hope business improves in May, so those who did not order at market will feel better about placing those orders,” he concluded.

(Source: furnituretoday.com)