Executive Summary

New orders were up 2% in March 2024 compared to March 2023, continuing our streak of 9 out of the last 10 months with overall order growth over the prior year. New orders were flat compared to February 2024. Year to date through March 2024, new orders are up 5% compared to 2023.

However, shipments in March 2024 were down (17)% from March 2023, and also down (4)% from February 2024. Year to date through March 2024, shipments are down (12)% compared to 2023.

March 2024 backlogs were down (17)% compared to March 2023, but up 2% from February 2024.

Receivable levels were down (3)% from February 2024, and down (9)% from March 2023, which is materially in line with the decline in shipments for the same periods.

Inventories and employee levels are again materially in line with recent months, but down from 2023, indicating that companies have substantially adjusted levels to match current operations.

National

Consumer Confidence

The Conference Board Consumer Confidence Index® rose in May to 102.0 (1985=100) from 97.5 in April.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to 143.1 (1985=100) in May from 140.6 in April.

Meanwhile, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—rose to 74.6 (1985=100) from 68.8 last month. Despite this improvement, for the fourth consecutive month, the Expectations Index was below 80, the threshold which usually signals a recession ahead.

“The survey also revealed a possible resurgence in recession concerns. The Perceived Likelihood of a US Recession over the Next 12 Months rose again in May, with more consumers believing recession is ‘somewhat likely’ or ‘very likely’. This contrasts with CEO assessments of recession risk: according to our CEO Confidence survey, only 35% of CEOs surveyed in April anticipated a recession within the next 12 to 18 months. Consumers were nonetheless upbeat about the stock market, with 48.2% expecting stock prices to increase over the year ahead, compared to 25.4% expecting a decrease and 26.4 expecting no change.”

On a six-month moving average basis, purchasing plans for homes were unchanged in May at their lowest level since August 2012. While still relatively depressed, buying plans for autos rose slightly for a second month, and buying plans for most big-ticket appliances increased for the first time in several months. Meanwhile, buying plans for electronics products were largely unchanged except for smartphones, which saw renewed interest.

Housing

Existing-home sales receded in April, according to the National Association of REALTORS®. All four major U.S. regions posted month-over-month declines. Year-over-year, sales decreased in the Northeast, Midwest and South but increased in the West.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – slid 1.9% from March to a seasonally adjusted annual rate of 4.14 million in April. Year-over-year, sales fell 1.9% (down from 4.22 million in April 2023).

Single-family home sales decreased to a seasonally adjusted annual rate of 3.74 million in April, down 2.1% from 3.82 million in March and 1.3% from the prior year. The median existing single-family home price was $412,100 in April, up 5.6% from April 2023.

At a seasonally adjusted annual rate of 400,000 units in April, existing condominium and co-op sales were unchanged from last month and down 7% from one year ago (430,000 units). The median existing condo price was $365,300 in April, up 5.4% from the previous year ($346,700).

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.02% as of May 16. That’s down from 7.09% the previous week but up from 6.39% one year ago.

Sales of new single‐family houses in April 2024 were at a seasonally adjusted annual rate of 634,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.7% below the revised March rate of 665,000 and is 7.7% below the April 2023 estimate of 687,000.

Compared to April 2023 on a seasonally-adjusted basis, sales were down (7.7)% overall with sales up 27.5% in the Midwest, down (15.1)% in the South and (5.0)% in the West, and flat in the Northeast.

Other

Real gross domestic product (GDP) increased at an annual rate of 1.3% in the first quarter of 2024, according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2023, real GDP increased 3.4%.

The increase in real GDP primarily reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

Compared to the fourth quarter, the deceleration in real GDP in the first quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending. These movements were partly offset by an acceleration in residential fixed investment. Imports accelerated.

Sales at furniture and home furnishings stores were down 0.5% in April 2024 from March 2024 on a seasonally-adjusted basis, and 8.4% from April 2023.

Thoughts

With the first quarter of 2024 in the books for purposes of our monthly stats, and approaching the mid-year mark on the calendar, available data continues to provide conflicting and somewhat perplexing indications for what the remainder of 2024 will hold.

Consumers continue to be anxious about future prospects despite certain positive economic trends (e.g. employment), and this seems to be negatively impacting discretionary spending on items such as home furnishings.

In addition, it now seems unlikely that the Fed will make any meaningful rate cuts in the next 6 months that would potentially drive additional housing activity and furniture purchases, with inflation still a focus and the elections looming large.

At this stage, it would seem the remainder of 2024 will continue to be challenging at the macro level, though nothing that the industry hasn’t managed through many times before. Individual operators will continue to look for opportunities amongst the challenges to be well-positioned for when things inevitably swing in the other direction.

New Orders

According to our latest survey of residential furniture manufacturers and distributors, new orders were up 2% in March 2024 compared to March 2023, continuing our streak of 9 out of the last 10 months with overall order growth over the prior year. Approximately half of the participants reported increased orders in March 2024 compared to a year ago. However, new orders were flat compared to February 2024. Year to date through March 2024, new orders are up 5% compared to 2023.

Shipments and Backlogs

Shipments in March 2024 were down (17)% from March 2023, and also down (4)% from February 2024. Shipments in March 2024 were down for approximately 85% of the participants compared to March 2023. March 2024 backlogs were down (17)% compared to March 2023, but up 2% from February 2024.

Receivables and Inventories

Receivable levels were down (3)% from February 2024, and down (9)% from March 2023, which is materially in line with the decline in shipments for the same periods.

Inventories were also down (2)% from February 2024, and down (22)% from March 2023, which is consistent with current operational levels.

Factory and Warehouse Employees and Payroll

The number of factory and warehouse employees was down (6)% from March a year ago, and down slightly from February 2024 with a reduction of (1)%. Similarly, payroll expenses were down (6)% from March a year ago, though up 5% from February 2024, likely due to the short prior month.

SIGN UP FOR FURNITURE INSIGHTS | VIEW OUR FURNITURE INSIGHTS BLOG