Smith Leonard’s latest Monthly Furniture Insight® survey of residential furniture manufacturers and distributors reported that for the first time since June 2020, new orders in July 2021 were down compared to the same month of 2020. New orders were down -11% compared to July 2020. However, July 2021 orders were up 24% compared to July 2019.
July 2020 was really just the start of the comeback from the worst business created by the pandemic, as orders were up 39% over July 2019. Interestingly, over one half of the participants reported increased orders from last year, some up significant double digits. On the other hand, some of the declines in orders were down by double digits. So, the results in July 2021 really related to how fast companies were coming back from the start of the COVID shutdowns. Year to date through July, orders were up 39%. Orders were up for some 91% of the participants.
Shipments were up 21% over July 2020 as there was plenty of backlog that could be shipped. The increase in shipments for the month put year-to-date shipments up 39%. Over 90% of the participants reported the increases in shipments both for the month and year to date. Shipments were down 19% from June 2021, but we believe that was related to vacation weeks for most.
Backlogs inched up slightly and were 108% higher than July 2020, as the lack of materials and labor as well as all the freight issues would not allow companies to ship more and cut into the backlogs. Receivable levels continue to make sense compared to shipments year to date. The change from June to July appeared to be a timing issue as shipments were down 19% with receivables down -2%.
Inventories were up 51% over last year, but last year inventories were down 10% so some of that is timing and the rest is participants knowing that having inventory now is critical. The issue now is, do you have all of the “right” inventory that you need.
FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
September 2021 Furniture Insights®