TEMPE, Ariz. – The U.S. manufacturing sector shrunk for the second month in a row in December, and furniture took another hit.

The Institute for Supply Management’s December report measured the manufacturing sector at 48.4%, its lowest reading since May 2020 and a 0.6% dip from November.

“The U.S. manufacturing sector again contracted, with the index at its lowest level since the coronavirus pandemic recovery began,” said Timothy R. Fiore, ISM chairman. “With panelists reporting softening new order rates over the previous seven months, the December composite index reading reflects companies’ slowing their output.”

Of the 18 manufacturing industries recognized by the ISM, just two reported growth. Furniture and wood products were both among those to record a loss. Furniture has reported a decline every month since May 2022.

Just three of 18 industries reported growth in new orders. Furniture was one to report a decline. In November, it had reported no change from October. Furniture and wood products were two of eight to report a decrease in production for the month.

The rest is a bit more positive:

• Furniture saw the second biggest boost in employment among manufacturing industries for the month. It was just one of five to report an increase.
• Furniture reported no change in the speed of supplier deliveries, while wood products saw faster deliveries.
• Furniture was one of six to see inventories contract.
• Prices for raw materials are down for every industry except apparel and leather products. Prices have now dropped for three straight months, following 28 months in “increasing” territory.
• Furniture and wood products both reported lower backlogs for the month.

Fiore expects the sector to continue to decline, at least for the beginning of the year.

“This is the second month of contraction and, as predicted, will likely be the norm for the index at least through the first quarter of 2023, with the index expected to be between 48% and 52%.”

Source: https://www.furnituretoday.com/