HIGH POINT, N.C. - As expected, the COVID-19 pandemic had a "downright ugly" impact on new residential furniture orders. New orders in April were down 61% compared to a year ago, and down 52% from March.  "As the pandemic hit, March orders were down 29% from March 2019. As expected, every one of our participants reported a significant decline in orders," said Ken Smith, managing partner at Smith Leonard in the latest Furniture Insights survey of manufacturers and distributors.

Year-to-date new orders declined 21% over 2019, the analyst and consulting firm noted. Previous to this month, year-to-date numbers were down 8%.

The June 2020 Furniture Insights report shows April shipments fell 50% compared to 2019 figures, and from March 2020 The April decline caused year-to-date shipments to drop 15% for the year, Smith Leonard reported. "Since shipments were not off as much as orders, it meant that there was some shipping from backlogs," Smith said.

Backlogs fell 8% from March and were down 12% compared to April 2019.  Receivables in April were down 21% compared to 2019 figures, "but not too bad considering year-to-date shipments were off by 15%. But receivables will be a problem most likely over the next couple of months as so many retail stores have been closed," Smith said in the report.

Inventory levels were down 4%, "as everything happened so quickly it was not possible to adjust. But we think from what we are hearing, business has come back quickly enough that having inventory has been a plus," he added.

Advance reports for retail sales in May noted a 17.7% increase over April but a 6.1% drop compared to May 2019. Furniture and home furnishings stores were down 22% from May 2019 and down 18.1% year to date. For the three-month period of March to May 2020, sales were down in the furniture and home furnishings stores 33.2% from a year ago.

"The April results of our survey were not that far off from the straw poll we took last month, as orders were down 61% from April last year. We expect a significant decline again in the May results but not as severe as in April," Smith noted.

"On the better news front, from our conversations, most have felt that business has come back somewhat better than expected. While not necessarily back to normal, at least they seem to be back to levels that can be dealt with. The overall concern has been 'will it continue' or is this just catching up the pent-up demand.

"On the not so good front, the virus issues are not going away. Unfortunately, the number of cases has started to rise again as states opened up. While some of this increase is attributable to more testing, the number of hospitalizations has also increased. We are certainly not experts in this area, but we think that hospitalization increases cannot be a good thing," he said.

"We are concerned for many of the small retailers and those that serve those dealers. As we are seeing in other industries, such as restaurants, some owners who are older, are just saying 'I quit,' choosing not to spend retirement money to keep the boat floating," Smith added. "Most folks have been through some bad times before and have some idea of what to do. At least the banks, for the most part, are not as difficult as they were in 2008 and 2009."

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