The latest Furniture Insights® report from Smith Leonard reveals signs of strain in the U.S. furniture industry, as new orders, backlogs, and consumer confidence waver under macroeconomic pressures, policy uncertainty, and cautious consumer sentiment.
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According to the June 2025 edition, new orders were down 9% in April 2025 compared to April 2024, and down 7% from March 2025. Year to date, new orders are now 4% lower than the same period in 2024. Shipments also declined 2% year-over-year in April and 4% from the previous month, though year-to-date figures remain flat. Backlogs fell by 10% compared to April 2024 and are down 2% month-on-month.
The dip in orders coincides with a significant drop in U.S. consumer confidence, which fell 5.4 points in June, according to The Conference Board. 'Consumer confidence weakened in June, erasing almost half of May's sharp gains,' said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. 'Consumers were less positive about current business conditions than May. Their appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory… Consumers were more pessimistic about business conditions and job availability over the next six months, and optimism about future income prospects eroded slightly.'
Signs of a "mini-recession" are already evident in parts of the industry. 'While not necessarily pervasive throughout the entire industry, some segments are likely in a mini-recession already, given how the furniture industry is typically one of the first to feel the impact of such economic effects,' the report notes.
Adding to this complexity are the ongoing impacts of tariffs, including the newly announced 20% Vietnam tariff, which has caught many in the industry off guard. According to Furniture Today, 72% of small to medium home furnishings companies report decreased sales due to tariffs. The Smith Leonard report notes this aligns with a 4% year-to-date average decline in new orders and an average 2% revenue drop across a sample of publicly traded furniture firms.
Despite these headwinds, some bright spots remain: housing inventories are improving, the stock market remains resilient, and some companies are seizing the moment to gain market share amid turbulence.
Still, uncertainty around tariffs, interest rates, and inflation signals a cautious road ahead. As the report concludes: 'It could be a bumpy ride for a little while as these issues fully settle themselves out and business returns to "normal," hopefully sooner than later.'
More information:
Smith Leonard Accountants & Consultants
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