August 2019 Furniture Insights

Executive Summary

New orders in June fell for the 5th consecutive month according to our latest survey of residential furniture manufacturers and distributors. New orders in June were 6% below June 2018 with 64% of the participants reporting lower order levels. June 2018 orders were up 5% over June 2017.

Year-to-date, new orders fell to 3% lower than same period in 2018 with 70% reporting lower orders year to date. The 2018 year to date orders were up 6% over year to date 2017.

Shipments in June 2019 were down 4% from June 2018. Year to date, shipments were about even with the same period last year. Last year, shipments through June were up 3%. For the year to date 2019, some 58% of the participants were reporting lower shipments. Backlogs in June were down 5% from last year, 3% lower than reported last month.

Receivable levels seemed to be back in line considering the above shipment levels with participants reporting receivable levels about even with last June and up 1% from May.

Factory and warehouse employee levels were down 3% from last year but payrolls year to date remained 2% above last year for the first six months.


Consumer Confidence

The Conference Board Consumer Confidence Index declined slightly in August with the Present Situation Index improving while the Expectations Index fell slightly. The Present Situation Index reached its highest level in 19 years. Consumers were favorable towards current business conditions and while still favorable towards future conditions, were not as favorable as last month. The report indicated that “While other parts of the economy may show some weakening, consumers have remained confident and willing to spend. However, if recent escalations in trade and tariff tensions persist, it could dampen consumers’ optimism regarding the short-term economic outlook.”


Existing-home sales improved in July after sales were down slightly last month. Sales were down in the Northeast, but up in all other regions. The report indicated that the supply of affordable housing is severely low, pushing prices up.

New residential sales in July were 12.8% below the June rate but were 4.3% ahead of July 2018. New sales were up substantially in the Northeast and up somewhat in the South and West but down in the Midwest when compared to last year. There was an estimated 6.4 month supply of new houses.

Housing starts in July were down 4% from June but were up 0.6% over July 2018. Single-family starts were up 1.3% over June and up 1.9% over June 2018. Starts were up in the South and West but down in the Northeast and Midwest.


Advance estimates for U.S. retail and food services for July 2019 were up 0.7% from June and up 3.4% from July 2018. Sales at furniture and home furnishings stores in July were basically even with July 2018 and down 0.5% year to date (down from an 0.8% decline reported last month).

The Consumer Price Index increased 0.3% in July after a 0.1% increase in June. Over the last twelve months, the index increased 1.8%, up from 1.6% reported last month. The increase was primarily influenced by increases in gasoline and electricity increases.

Non-farm payroll employment rose by 164,000 in July while the unemployment rate remained at 3.7%. Gains were reported in professional and technical services, health care, social assistance and financial activities.


We hate to sound like we are repeating ourselves, but for the most part, most of the residential furniture business from the domestic manufacturers and distributors has been sluggish at best. While 2018 was a decent growth year that followed several years of increased business, five straight months of declining incoming business is a concern. Shipments were slower as well but only buoyed by eating into backlogs.

The Consumer Confidence report may say that “consumers have remained confident and willing to spend,” but it doesn’t appear that they are spending on furniture. We read the analysis from Home Furnishings Business that said married couples with children six years old and under spend more annually than any other segment according to their research. The problem with that is that the segment is the smallest of all the categories in terms of numbers of consumers.

Also wondering recently if I need a new phone and hearing what the price of the new phones are, it made me try to remember how long ago it was that they gave us phones for the monthly service fees. Think that along with many other gadgets might reduce the dollars available for new furniture?

In our talks with others in the industry, we continue to wonder, with all the normal factors that seem to help furniture sales, why business is not better? Maybe it really is that consumers are spending, but instead are choosing the gadgets and other tech items that seem more exciting and provide instant gratification. These purchases also do not require any remodeling or painting, etc. that sometimes accompany furniture purchases.

Happy Labor Day!

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