The U.S. residential furniture industry witnessed modest signs of improvement in March, according to the latest Furniture Insights report by Smith Leonard. Despite year-to-date figures still reflecting a minor decline, the industry appears to be stabilising amid improving consumer sentiment and easing tariff anxieties.
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New orders in March 2025 increased by 1% compared to both March 2024 and February 2025. However, year-to-date orders remain down 2%, suggesting lingering caution in the market. Shipments also rose by 1% year-over-year and jumped 6% from February, likely compensating for the prior month's shortened calendar. Still, shipments remain flat year-to-date.
Approximately two-thirds of survey participants reported increases in both new orders and shipments in March versus the same month a year earlier. While encouraging, backlogs were down 6% year-over-year, mirroring February's results, and slipped 1% from the prior month, indicating that new orders and shipments were largely aligned.
Receivable levels dropped 3% from February and 2% from March 2024, reversing the previous month's increase that was attributed to timing discrepancies. Inventories edged up 1% from February and 3% from March 2024, remaining in line with operational expectations. Meanwhile, the number of factory and warehouse employees declined 4% year-over-year, while payroll expenses increased 5% month-over-month but were down just 1% year-over-year.
Reflecting broader economic sentiment, The Conference Board Consumer Confidence Index surged 12.3 points in May to 98.0, marking a reversal after five months of decline. 'Consumer confidence improved in May after five consecutive months of decline,' said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. 'The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards.'
The Expectations Index climbed 17.4 points to 72.8, while the Present Situation Index rose 4.8 points to 135.9. Guichard noted, 'Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects.'
Following the partial tariff reprieve in May, consumers' purchasing intentions rebounded across key sectors, with marked increases in plans to buy homes, cars, appliances, electronics, and other big-ticket items. Spending intentions for services also rose, with dining out remaining the top priority, followed by streaming services and a sharp rise in interest in live entertainment.
Housing market data revealed a 0.5% dip in existing-home sales in April, though new single-family home sales rose 10.9% month-over-month and 3.3% year-over-year, suggesting pockets of renewed activity.
'This month we saw another tariff reprieve as negotiations continue, which hopefully provides some guidance to the industry as to how the situation is going to ultimately play out,' the report stated. While 75% of the Top 100 retailers reported declines in 2024, year-to-date sales at furniture and home furnishings stores were up 8% through April, suggesting demand may be reawakening.
With stabilising economic conditions, potential rate cuts later this year, and growing consumer optimism, the sector is cautiously hopeful for a rebound in the latter half of 2025.
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