New orders for furniture fell 2% in March 2016 compared with the same month last year, according to the latest Furniture Insights survey of residential furniture manufacturers and distributors from accounting and consulting firm Smith Leonard.

New orders for March were down for some 56% of the participants in the most recent survey. Year-to-date, new orders were just slightly less than the first quarter of last year, with the same percentage of participants reporting declines in orders. Shipments rose 4% compared with March 2015 and were up 2% year-to-date. For the month, shipments were up for 61% of the participants but year-to-date, only 47% reported increased shipments.

With shipments exceeding orders, backlogs fell 5% from February and were down 8% from March 2015. Receivable levels were 4% lower than March 2015 in spite of the increase in shipments for the month and year-to-date.

“We believe there are likely some timing issues involved and will wait to see if back in line next month,” said Smith Leonard Managing Partner Ken Smith in the survey report. Inventory levels fell 2% from February but remained 5% ahead of March 2015. “These levels appear to be trending in the right direction.”

Smith said his conversations with vendors over the last couple of months have ranged from one extreme to another, with some saying business has really slowed down, but some saying business is pretty good with some concerned about enough labor to cover orders.

“In addition, while most of the increases are in upholstery, a few are reporting good case goods numbers,” he noted. “Most of our conversations have noted the sales at retail are soft. While the national reports for retail sales at furniture and home furnishings stores were up 3.4% year-to-date, we think there must be some increases in other than pure residential furniture sales (such as mattresses).”

(Source: Furniture Today  Author: Powell Slaughter)