EXECUTIVE SUMMARY
New orders were up 1% compared to the prior month of December
2025 and flat compared to January 2025.
January 2026 shipments were flat compared to December 2025 and
down 7% from January 2025.
January 2026 backlogs were flat compared to both January 2025
and December 2025.
Receivable levels were up 15% from December 2025, and were up a
more modest 1% compared to January 2025.
Inventories were up 7% with December 2025 and up 9% from January
2025.
Payrolls were up 8% compared to December 2025, but down 2%
compared to January 2025.
Employee levels are again materially in line with recent months
and the prior year.
The US furniture industry entered 2026 with mixed signals, as
flat demand, rising inventories and increasing cost pressures
point to a challenging outlook, according to the latest March
2026 Furniture InsightsŪ report From Smith Leonard.
January figures show new orders up just 1 percent month-on-month
and flat year-on-year, while shipments remained unchanged from
December but fell 7 percent compared to January 2025. Backlogs
also held steady, indicating limited momentum across the sector
at the start of the year.
At the same time, operational pressures are building.
Inventories rose by 7 percent compared to December and 9 percent
year-on-year, while receivables increased by 15 percent
month-on-month. Payroll costs climbed 8 percent from the
previous month, although overall employment levels were slightly
down compared to last year.
On the demand side, consumer confidence edged up marginally in
March, with the index reaching 91.8. However, expectations for
the future declined, reflecting concerns around inflation, trade
and geopolitical instability. As noted, "Consumer confidence
ticked up again in March… nonetheless, the Index has been on a
general downward trend since 2021."
Rising inflation expectations, driven in part by higher oil
prices and tariff-related costs, are beginning to influence
consumer behaviour. Plans to purchase big-ticket items shifted
more towards caution, although furniture remains one of the most
consistently cited categories for future spending.
Housing trends provide a mixed backdrop. Existing home sales
increased modestly by 1.7 percent month-on-month, supported by
improving affordability, while new home sales declined
significantly, down 17.6 percent from December and 11.3 percent
year-on-year. Given the close link between housing activity and
furniture demand, this divergence adds further uncertainty to
the sector outlook.
The report also highlights growing cost challenges linked to
geopolitical developments, particularly the Iran conflict.
Rising transportation and material costs, especially foam—are
already impacting supply chains, with availability constraints
adding further pressure.
Despite these headwinds, some indicators remain stable,
including consumer confidence and improving housing
affordability. However, ongoing uncertainty around tariffs,
inflation and interest rates continues to shape business
sentiment.
As the report concludes, the combination of geopolitical risks,
cost volatility and uneven demand suggests that "2026 could be
shaping up to be another bumpy ride" for the furniture and
interiors industry.
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Source:
smith-leonard.com
