Executive Summary

According to our latest survey of residential furniture manufacturers and distributors, new orders in February were up 4 percent over February 2016 new orders. This increase brought the year-to-date increase up to a 2 percent increase after flat results in January. Year-to-date, orders were up for 58 percent of the participants. The good news was that orders in February were up for two-thirds of the participants.

Shipments in February were up 3 percent over February 2016 and up 1 percent from January. Last year in February, shipments were up 3 percent over 2016. Year-to-date, shipments were up 3 percent with some 61 percent of the participants reporting increased shipments.

Backlogs were pretty stable for the month of February with the results being just slightly higher than last year. Last year, February backlogs were down 3 percent from February 2015.

Receivable levels, up 5 percent, were a bit higher than the 3 percent increase in shipments for the month, as well as year-to-date. Overall though, based on results for some time now, receivables generally appear to be in pretty good shape.

Inventory levels fell 3 percent from February 2016 as well as 3 percent from January. February 2016 levels were up 5 percent from the previous year, so it appears that participants are getting inventories in line.

Overall, the factory and warehouse payrolls and employee levels seem to be back in line with current conditions after some unusual results last month.

National

Housing

March existing-home sales rose again, this time surpassing January as the strongest month since February of 2007. The big issue now is the lack of inventory as homes come off the market significantly faster than normal.

Sales were up in all regions except the West, but compared to last year, sales were up 4.1 percent in the Northeast, 3.1 percent in the Midwest, 8.5 percent in the South and 5.2 percent in the West.

The median existing single-family home sales price was $237,800, up 6.6 percent from March 2016.

New home sales were also up, increasing 5.8 percent above February and were 15.6 percent above March 2016. New privately-owned house sales in March were up 21.9 percent in the Northeast, 23.5 percent in the Midwest, 5.9 percent in the South and 32.6 percent in the West compared to March 2016.

Privately-owned housing starts were down 6.8 percent from February but remained 9.2 percent ahead of March 2016. Starts were up in all regions except for the Midwest.

Other

U.S. retail and food services sales in March fell 0.2 percent after an increase of 0.1 percent last month. Still these sales were up 5.2 percent over March 2016. Sales for the quarter ended March were up 5.4 percent over the same period a year ago.

Sales at furniture and home furnishings stores were up 2.9 percent over March 2016 and up 2.1 percent year-to-date. Sales were down 0.3 percent from February.

Consumer prices decreased 0.3 percent in March led by a 3.2 percent decline in the energy index, with the gasoline index falling 6.2 percent. The food index rose with food at home index increasing 0.5 percent.

Nonfarm employment increased only 98,000 jobs but the unemployment index fell to 4.5 percent. The number of unemployed persons fell by 326,000.

Consumer Confidence

Consumer confidence declined to 120.3 after increasing to 124.9 in March. The Present Situation Index fell to 140.6 from 143.9 and the Expectations Index fell to 106.7 from 112.3 last month.

According to the report, consumers’ assessment of business conditions fell as did expectations from the labor market. Consumers were less optimistic about the short-term outlook with expectations for improving business conditions falling to 24.8 percent from 26.9.

Thoughts

Based on our conversations at the High Point market, recent results have been mixed. We used the term “spotty” at times though we thought that might be a bit negative, yet many agreed with that term.

With that said, overall we felt that the market was a good one. Some seemed to think traffic was down, but many we talked to, said their showroom traffic was up. Even though some said their traffic was down, those folks said it was a great market.

The April market was an unusual one for sure. In all our years, we did not recall an April market where it rained three days straight. Actually a few times, it didn’t just rain, it poured. But the transportation system did its job, at least for us, and we felt that most people got around pretty well.

The overall U.S. economy, according to the advance reports on GDP, started the year rather sluggish. We are not really certain why unless it relates to the lack of cooperation in Congress keeping things from happening. The reality is that overall things are still pretty good. Interest rates are still low in spite of a few raises in rates expected. The stock market is good, housing is good and despite a small drop in consumer confidence this month, the indexes are still very strong.

We continue to expect 2017 to be a good year for the residential furniture business.

By the way, while we are not fashion gurus, we felt most of the showrooms we visited really stepped up a notch or two. We sure added to our list of the best looking showrooms at market.