April 2025 Furniture Insights Report From Smith Leonard

Furniture World News Desk on 5/5/2025

Executive Summary

New orders were down 5% in February 2025 compared to February 2024. However, new orders were up 2% compared to the prior month of January 2025. Year to date through February 2025, new orders are down 4% compared to 2024.

Shipments were also down 5% in February 2025 compared to February 2024. Shipments were down 8% compared to the prior month of January 2025, which may be a function of the short month. Year to date through February 2025, shipments are flat compared to 2024.

February 2025 backlogs were down 6% compared to February 2024, but up 2% from January 2025 as new orders outpaced shipments during the month. Receivable levels were up 1% from January 2025, and down 1% from February 2024.

Inventories were down 1% from January 2025 and down 2% from February 2024, which are in line with prior periods and current operational levels.

Inventories and employee/payroll levels are again materially in line with recent months, but down from 2024, indicating that companies have aligned levels to match current operations.

Inventories and employee/payroll levels are again materially in line with recent months (though December payroll was down from November due to holidays), but down from 2023, indicating that companies have aligned levels to match current operations.

National

Consumer Confidence

The Conference Board Consumer Confidence Index® fell by 7.9 points in April to 86.0 (1985=100).

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—decreased 0.9 points to 133.5.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—dropped 12.5 points to 54.4, the lowest level since October 2011 and well below the threshold of 80 that usually signals a recession ahead.

“Consumer confidence declined for a fifth consecutive month in April, falling to levels not seen since the onset of the COVID pandemic,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. “The decline was largely driven by consumers’ expectations. The three expectation components—business conditions, employment prospects, and future income—all deteriorated sharply, reflecting pervasive pessimism about the future. Notably, the share of consumers expecting fewer jobs in the next six months (32.1%) was nearly as high as in April 2009, in the middle of the Great Recession. In addition, expectations about future income prospects turned clearly negative for the first time in five years, suggesting that concerns about the economy have now spread to consumers worrying about their own personal situations. However, consumers’ views of the present have held up, containing the overall decline in the Index.”

On a six-month moving average basis, purchasing plans for both homes and cars declined, as did vacation intentions. Plans to buy big-ticket items—including appliances and electronics—pulled back in April but were mostly up on a 6-month moving average basis. Consumers’ overall intentions to purchase more services in the months ahead were down, with almost all services categories affected. While dining out remained number one among spending intentions, the share of consumers planning to spend more on dining out in the months ahead registered one of the largest month-on-month declines on record in April.

Housing

Existing-home sales descended in March, according to the National Association of REALTORS®. Sales slid in all four major U.S. regions. Year-over-year, sales dropped in the Midwest and South, increased in the West and were unchanged in the Northeast.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell 5.9% from February to a seasonally adjusted annual rate of 4.02 million in March. Year-over-year, sales drew back 2.4% (down from 4.12 million in March 2024).

Single-family home sales retreated 6.4% to a seasonally adjusted annual rate of 3.64 million in March, down 2.2% from the previous year. The median existing single-family home price was $408,000 in March, up 2.9% from March 2024.

Existing condominium and co-op sales were unchanged in March at a seasonally adjusted annual rate of 380,000 units, down 5.0% from one year ago. The median existing condo price was $363,000 in March, up 1.5% from the prior year ($357,700).

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.83% as of April 17. That’s up from 6.62% one week before but down from 7.1% one year ago.

Sales of new single-family houses in March 2025 were at a seasonally-adjusted annual rate of 724,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.4% above the February 2025 rate of 674,000, and is 6.0% above the March 2024 rate of 683,000.

Compared to March 2024 on a seasonally-adjusted basis, sales were up 6.0% overall with sales also up 22.3% in the South, but down 15.9% in the Midwest, down 33.3% in the Northeast, and down 12.2% in the West.

Other

Real gross domestic product (GDP) decreased at an annual rate of 0.3% in the first quarter of 2025 (January, February, and March), according to the advance estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4%.

Sales at furniture and home furnishings stores in March 2025 were down 0.1% compared to February 2025 on a seasonally-adjusted basis, but up 7.7% from March 2024. Year to date on a non-adjusted basis, sales were up 4.9% (3.8% last month).

According to our latest survey of residential furniture manufacturers and distributors, new orders were down 3% in January 2025 compared to January 2024. However, despite the overall decrease, approximately two-thirds of participants reported increases versus decreases in January 2025 compared to a year ago. New orders were up 2% compared to the prior month of December 2024, which would seem to include some seasonality due to the December holiday break.

New orders were up 2% compared to the prior month of January 2025, which were also up 2% over December 2024.

Year to date through February 2025, new orders are down 4% compared to 2024.

February 2025 shipments were down 5% compared to February 2024, and also down 8% compared to January 2025. Consistent with new orders, shipments in January 2025 were up for approximately half of the participants compared to February 2024 despite the overall decrease. Year to date through February 2025, shipments were flat compared to 2024.

February 2025 backlogs were down 6% compared to February 2024, but up 2% from January 2025 as new orders outpaced current shipments during the month.

Receivable levels were up 1% from January 2025, but down 1% with January 2024, which may be an indication of a slight worsening in collective agings (given lower shipment rates) but could still just be normal timing differences with collections.

Inventories were down 1% from January 2025 and down 2% from February 2024, which are in line with prior periods and current operational levels.

The number of factory and warehouse employees were down 3% from February a year ago, but again relatively even with the prior month (down 1%).

Payroll expense was down 7% in February 2025 compared to January 2025, presumably due to the short month. February 2025 payroll expense was down only 2% compared to February 2024. However, year to date through February 2025, payroll expense was up 4%, which would seemingly be a bit of an anomaly that will straighten itself out as the year continues.

Thoughts

It was certainly great to see many of you in sunny High Point last week for Market.

Expectations were understandably tempered coming in, but most people we spoke with were pleasantly surprised. Tariffs were obviously a huge topic of conversation, but some said it still felt like a “normal”market, with others saying it was one of their best in recent years due in part to exciting new introductions and/or new opportunities with retailers exploring their domestic versus import options. While traffic was reported to be down (particularly international), those who were there seemed ready to do business.

Most we spoke with said they understood the need for action on the global economic front, but took issue with the rollout and disruption and uncertainty that it caused, particularly right before Market. What’s clear is that with limited exceptions, everyone within the industry will be impacted by tariffs in some form or fashion, even those generally considered to be “domestic” manufacturers due to international sourcing of components such as fabric. For now, clearly the less exposure to China goods, the better, for those with foreign supply chains.

Meanwhile, consumer confidence declined for a fifth consecutive month, though there do seem to be some positive signs with housing and the stock market volatility seems to have calmed down for the moment(as of this writing).

As to our monthly stats, due to the 2-month lag, we are still reporting on pre-tariff activity. However, new orders were down approximately 4% for our participants year-to-date through February 2025 compared to 2024.That said, we have seen industry reports and heard from people at Market that there may be some demand being pulled forward in March and April 2025 in response to the tariffs (similar to auto and appliance reports), so it will be interesting to see how that plays out over the next few months as the tariff story plays out.

Mark Laferriere, Assurance Partner
 Mark has nearly 25 years of experience working in broad-based public accounting. He is an integral member of the firm’s Furniture practice group and provides various assurance services for manufacturing, distribution, and transportation clients. He is also a member of the Employee Benefit Plan group.

This Furniture Insights® newsletter report has been re-published with the permission of Smith Leonard PLLC an independent member of the BDO Seidman Alliance.

Firm Profile: Founded in 1930 by BDO Seidman, LLP, the High Point, North Carolina practice was recently acquired by four individuals who have spent the majority of their 100+ year careers building the existing practice. Beginning January 1, 2007, Smith Leonard PLLC became an independent member of the BDO Seidman Alliance. Partners are Ken Smith, Darlene Leonard, Jon Glazman and Mark Bulmer. Among the firm's 32 employees are 18 CPAs.

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