Furniture/Furnishings Weekly
The office furniture group fell 6% last week, breaking a streak of outperformance, as indicators pointed to weakness. The office furniture group is up ~21% in 2023 and 32% over the past 12 months. The Architectural Billings Index (ABI), a diffusion index and key leading indicator of non-residential construction activity (9-12 months), fell to 44.8 in September from 48.1 in August (AIA). A score above 50 indicates an increase in billings from the prior month, and a score below 50 indicates a decrease in billings from the prior month. While residential billings were the weakest, the commercial/industrial index declined sharply. ABI weakness was mirrored by a sluggish return to office as measured by the Kastle Systems Index, which remains at or below 50%. A more positive datapoint came from the Census Bureau Household Pulse survey. The survey reported that 26% of US households have someone working from home, down from a peak of 37% in early 2021. The prior post-pandemic low had been 27% in January. On the residential side, new home starts (an indicator for residential furniture) accelerated 7% in September versus August to 1.36 million units. September new home sales, which we track in the graphs below, were not yet available. The existing home sales slump continues, falling 2% to 3.96 million units. French luxury furniture retailer Roche-Bobois SAS reported revenue of €98.4 million, in line with expectations, and down from €103.2 million a year ago. The company raised its EBITDA outlook for the year. About 30% of Roche-Bobois sales are in the US. Relative strength in luxury and designer furniture is consistent with the intelligence we had from the High Point Furniture Market a week earlier.
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