By: Furniture World Magazine 

Monthly Forecaster
New Orders.
According to our most recent survey of residential furniture manufacturers and distributors, new orders in January 2013 increased 6 percent over orders in January 2012─a good start for the New Year.

New orders were up 9 percent over December 2012 results. Normally, orders are up in January over December, but this month’s results were better than normal.

Over 58 percent of our participants reported increased order levels with several reporting healthy double-digit increases. This is compared to only 35 percent of the participants reporting increases in December 2012 over December 2004.

Shipments and Backlogs. Shipments in January were basically even with January 2012, but fell 9 percent compared to December. The decline from December is somewhat normal as there was a 10 percent decline in January 2012 compared to December 2004.
Approximately 46 percent of the participants reported increased shipments in January compared to January 2012. This percentage compares favorably to the 30 percent reported in December and 40 percent in November 2012.

With orders up and shipments relatively flat, backlogs increased 10 percent over December levels and were up slightly over last January.
Receivables and Inventories. Receivables levels were essentially unchanged from January 2012, in line with shipments. Receivables fell 3 percent from December, somewhat less than the decline in shipments, but this imbalance is also somewhat normal, starting off the New Year.

Inventories in January were 1 percent lower than January 2012 levels and were basically even compared to December. These levels were consistent with the latter part of 2012 results.

Factory Payrolls and Employment. Factory payrolls fell 14 percent compared to December, but again that is somewhat normal with December payrolls including year-end vacation and bonuses. Last month, December payrolls were 14 percent higher than November.

The number of factory employees was even with December levels and were 5 percent lower than January 2012 levels. This is consistent with the decrease reported in December and also consistent with the reported 8 percent reduction in factory payrolls comparing January 2013 to January 2012.

National

Gross Domestic Product─According to final estimates by the Bureau of Economic Analysis, real gross domestic product─the output of goods and services produced by labor and property located in the U.S., increased at an annual rate of 1.7 percent in the fourth quarter 2012. This increase compared to a 4.1 percent increase in the third quarter.

The increase in real GDP in the fourth quarter primarily reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), exports, equipment and software, and residential fixed investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the fourth quarter primarily reflected a deceleration in PCE, an acceleration in imports, a downturn in federal government spending, and decelerations in equipment and software and in residential fixed investment that were partly offset by an upturn in inventory investment and an acceleration in exports.

Economic Indicators

The Conference Board reported that the U.S. leading index decreased 0.2 percent in February, while the coincident index increased 0.3 percent and the lagging index increased 0.1 percent.
The decrease in the leading index followed four consecutive increases. The index had increased 1.5 percent from August of 2012 (an annual rate of 2.9 percent). Five of the ten indicators increased in February─manufacturers’ new orders for non-defense capital goods, real money supply, average-weekly manufacturing hours, manufacturers’ new orders for consumer goods and materials and interest rate spread. These increases were more than offset by vendor performance, index of consumer expectations, average weekly claims for unemployment insurance (inverted), building permits and stock prices.