Executive Summary

According to our latest survey of residential furniture manufacturers and distributors, new orders in November 2016 were 8 percent higher than November 2015. This followed a 1 percent increase reported in October. Orders were up for some 61 percent of the participants for the month.

Year-to-date, new orders were up 3 percent over the same period a year ago. Only 43 percent of the participants reported increased year-to-date orders. Last year, November 2015 new orders were up 4 percent over year-to-date 2014.

Shipments were up 4 percent over November 2015 with 58 percent of the participants reporting increased shipments. Year-to-date, shipments were up 1 percent over the same period a year ago. Year-to-date, shipments in November 2015 were up 6 percent over the previous year.

Receivable and inventory levels appear to be in line for the most part with current conditions. Receivables were up 4 percent from November 2015 in line with the increase in shipments. Inventories were even with October and down slightly from November 2015.

The number of factory and warehouse employees was up 2 percent from last year and October, but payrolls were about even. Factory and warehouse payrolls were up 1 percent year-to-date, very much in line with current conditions.

Housing

Existing home sales “closed out 2016 as the best year in a decade,” according to the National Association of Realtors^®. Single-family home sales were down slightly in December, but were still 1.5 percent above December 2015 sales.

Existing home sales in December were higher than last year in all regions of the country except for the West where they were 1.6 percent below a year ago.

New residential home sales fell from November and were 0.4 percent lower than December a year ago. For the year though, sales of new homes were up 12.2 percent over 2015.

Housing starts were up 11.3 percent over November 2016 and up 5.7 percent above December 2015. Single-family starts in December 2016 were up 3.9 percent over December 2015. For the year, single-family starts were up 9.3 percent overall with all areas of the country posting nice increases.

Other

Other reports for the period were also mostly favorable. Retail sales were up slightly from November and 4.1 percent ahead of December 2015. Sales at furniture and home furnishings stores were up 3.1 percent from December 2015 and up 3.8 percent for the year.

The Consumer Price Index increased 0.3 percent in December and over the last 12 months, increased 2.1 percent. Most of this increase related to increases in energy, especially in gasoline, but that is a bit misleading since gas prices had fallen so much in the previous two years.

Nonfarm employment increased by 156,000 in December. The unemployment rate was little changed at 4.7 percent. Job growth was strong in health care and social assistance.

Consumer Confidence

The January consumer confidence reports were quite different this month. The Conference Board’s report indicated a slight retreat after reaching a 15-year high in December. The decline was driven by a less optimistic outlook for business conditions, jobs and income prospects. Yet consumers’ assessment of current conditions improved.

On the other hand, the University of Michigan’s survey of consumers noted that consumers expressed a higher level of confidence in January than any other time in the last “dozen” years. “The surge in confidence was driven by a more optimistic outlook for the economy and job growth during the year ahead as well as more favorable economic prospects over the next five years.”

Thoughts

Even though the Conference Board’s survey was down slightly, both surveys indicate that consumer confidence is much stronger. Most of the other key factors for selling furniture are still positive. Even with the stock market slight pull back, overall, it is still strong. And from what we are hearing, while business can always be better, it seems to be doing fairly well. Though based on our survey, that is not true for everyone.

Apparently, except for rain, the Las Vegas Market was well attended with good reports. So hopefully as we begin 2017, business will continue to be good.