Cabinet sales down a ton in May, anyone seeing encouraging signs?

The Dow is over 9000 today. It is supposed to be a leading indicator of what is coming down the pike.

-- Debt is nothing more than the 21st Century's form of slavery.

We’ve had some increase in sales lately, but it’s still much slower than last year, I think. However, our new CEO and production manager have decided that we need to produce more new designs to spur sales, and so they are keeping me busy. I don’t see sales reports, and so I don’t know the actual numbers, but our business took a fairly big hit last October. I’ve done several new chair designs (as well as floor lamps) that will be installed in our New York and London showrooms this fall. I can post pictures, once they have been launched. A lot of our cabinet makers are not nearly as busy as they would like to be, however. Real estate prices started going back up this month where I live.

The stock market is up but employment will keep lagging they say. Wonder if that is an indicator.

-- The smell of wood, coffee in the cup, the wife let's me do my thing, the lake is peaceful. http://web.me.com/deceiver6/Deceiver/Craftsman_on_the_lake/Craftsman_on_the_lake.html

Cabinets are one of the last items to be installed. If construction started today, you would not see any profit for 4 to 9 months. I would suspect that cabinet makers will be well aware of the increase of housing starts so as to prepare for the future.
I don’t think we will see, for the next decade at least, housing reaching anywhere near what we had 18 months ago. Hopefully, housing will pick up a little within the next 12 months. But who knows where interest rates will be, or how many can afford extreamly high down paymnts (compared to what we saw for the last 10 years), whether or not we will have hyper inflation with all the money the gov is printing.

Sorry, but I am pretty pesimistic. Builder since 1985, saw permits drop from an annual rate of 2,300 to an annual rate of 130 in 8 months in my county. If you want to see what the economy is doing, track cardboard box manufacturing. They are the best indicator of future economic growth.

Larry

There is a slew of economic indicators both Government and internal business. Maynard is right on with the cardboard box indicator. We buy them from a local company that makes them. They are producing and selling 24% of what they did in the same quarter of 06.

While the Dow went over 9000 today which was fueled by existing home sales being up 3.6% but they are up because of low prices…short sales, banks dumping forclosed inventory.

If you think that the unemployment rate at say 10.6% in your area is a real # think again. In all actuality it is probably 5-7 percentage point higher and one of the factors in this is people that have simply given up looking for work, can’t get on the claim bandwagon anymore and thye newly graduated that can’t find work and are not being counted.

-- http://www.federalsaw.com

Try 20% unemployment in my area ,Cabinet sales zero since October ,furniture commissions 0 since January.
Thank goodness for some construction work the in the last 3 weeks.

-- Jim from Heirloom Woodshop Southern Oregon

I had a customer call today and ask for a custom double vanity in rustic solid wood , finished , with a budget range of a couple hundred dollars. What an indicator !

rob, if that is an indicator of thing to come, well…....... With all the people left out of the real unempolyment figures, the offical 10% nation wide is probably close to 20 :-((

-- Debt is nothing more than the 21st Century's form of slavery.

Sacramento city’s building department is about 1/4 of what it was a couple of years ago and getting smaller. I use them as an indicator of things to come. I have seen maybe ten new homes being constructed in about 2 years. The folks who are buying short sales and foreclosed properties are mostly doing the work themselves. I, personally don’t want much to do with that crowd of nickel and dimers.We have many large furniture stores closing their doors. So, the stock market goes up right now because businesses are betting the Oscrewya administration will not get the so-called health reform accomplished. This will save many thousands of small businesses. Thus, saving jobs.

The cabinet shop’s are down to extremely low numbers of employees or closing their doors. I am still doing some shop work but mainly contracting now. It helps to be diversified.

-- Oldworld, Fair Oaks, Ca

We are not getting any new jobs either. Once we complete this major project we have been working on for over a year now, I see the boss drastically downsizing. I think he will layoff over half of the workers we now have. Housing permits are down to nothing around here and not looking any better into next year from what we are being told.

-- Jerry--A man can never have enough tools or clamps

There are many reasons the equity markets goes up and down, but it is never the reason you hear on the news. The DOW is composed of 30 stocks, with not a homebuilder in the bunch. The “market” bottomed in March because it reached fair market value territory. The premium was sold out of the market. You have to look back to the mid 1990s to make since of it all. In 1995, the Fed started to let the money suppy outpace GDP by 2/3s. This means really cheap money. This money was used to fuel the internet bubble. Normally that much money sloshing around in the economy would cause inflation. But, as you know, outsourcing became more common, keeping a cap on labor prices. Cheap labor plus cheap money equals a hugh economy. Dwell on this: GDP for the first quarter of 1995 was $7.298 trillion. In the second quarter of 2008 it was at $14.294 trillion. Our economy doubled in just 13 years. OK. I’ve written a lot without making a conclusion but I got to go. I’ll try to finish my humble opinion later.

-- david roberts, houston area, "A little knowledge is a dangerous thing, but that has never been a problem for me."

the homing industry is starting to stabilize and pick up again – people buy/remodel homes = people need more cabinets and woodwork. may not be later on this evening, but it’s a good sign of whats to come.

-- When in doubt - There is no doubt - Go the safer route.

New home sales have fell through the floor but things have actually picked up in my part of the state for remodeling. This area is pretty insulated from the economy….with the two biggest employers in the area being the state prison and the Army ammunition plant that makes almost every bomb for the military (Always need prisons and bombs I guess). Plus this town is loaded with “Old Money” ...probably 50% of all the business’s here have been in the same family for a couple of generations.

Granted “New” Home sales have really dropped because people are scared of what may happen…but those same people who seem to build a new house every few years are now remodeling…or buying older house’s for their kids and fixing them up.

Some of the ones who are fixing up and remodeling are going all out in the cabinets and custom furniture and built In’s.

-- Don S.E. OK

Guys,
From most of your comments it seems for many of you business has been focused on new home construction needs. And we all know that the days of easy mortgage credit are long past and won’t be coming back any time soon. I’d expect to find almost no new construction-happens to be the case in my area as well as other parts of the country.
I think Don K’s perspective is an interesting one, and easy to understand. People are staying put in the houses they currently own, and if they’re still working will want to remodel and upgrade their space. That was the pattern pre-2001 before the bubble, and flipping properties as a hobby.
What’s puzzling is the sense I’m getting that those of you whose business came from new construction are not refocusing on the remodeling market?
Is there a business “retooling” obstacle keeping that from happening?

-- Gerry

other than a few vanities, and one small kitchen remodel. all ive done is a handful of furniture jobs. this year antique restoration has been big for me, seems like thats all ive done

-- BlueMillWoodworking@gmail.com

As many I have had to branch out into other area, I have found the competition has increased and the jobs have decreased, I now find plumbers, electricians and other handyman types working outside their expertise to try to survive. A plumber I know will take any work he can find, he recently did a hardwood floor and crown molding installation, having had 0 experience, but he needed the cash and he had just finished a hot water tank replacement for the same customer and sold her the hardwood floor installation.

In the furniture biz in my area furniture stores are closing by the bucket load, large and small alike.

There are much fewer commission for high end custom furniture.

New homes are still being built in my area but its down some 80% from 2 years ago.

Wins have come from prior customers and networking (Rotary, Kids Soccer, Local Chamber). If you want to sell stuff you have to be proactive and look for the work (much more than in years past) as few potential customers will knock on your door or respond to your web site.

Overall its a tough year I spend a ton of time marketing and substantially less time building.

Work has come to an almost standstill around here. Unemployed workers aren’t really looking for custom woodwork. I now consider myself self unemployed. If it weren’t for a paid off house, my lack of debt and my not justifying my existence by buying crap I don’t need on a credit card, I would be, like most, screwed. Anyone who believes that we have hit bottom and things are about to get better is living in a dream world. Look past what your being fed on the news and in national papers and educate yourself on the truth of our situation.

It isn’t too late to WAKE UP!

-- http://www.efcabineture.com/ You can be tired, or you can be broke, but you should never be tired and broke.

We were slow for the first quarter, but have picked up significantly in June and July. Lead times of about 20 weeks right now, so I feel very lucky.

JP

I understand your frustration Rhett as I hear it from some customers around the country but in July and now a week in to August, I’m seeing rays through the clouds in many sections of the country. While it may not be in custom furniture the bottom line weather you’re a builder or a supplier is diversity in what you offer.
While you can’t be all things to all people you can still give it your best shot!

I like the work you show on your web site. Very unique.

-- http://www.federalsaw.com

My cabinet business has died. It started out decent the first of the year, but it has been dead since May. My business typically slows down during the summer, but never like this. I have to keep checking my cell phone to make sure it is still working. Fall has always been my busy time for custom closets. As soon as the kids start back to school, my phone starts ringing. School starts back in Atlanta next week, so my anticipation is high.

-- I don't make mistakes, only design changes....www.dgmwoodworks.com

closetguy, our customer base that is closet maker only…in the state of Florida is deader than can be. Unfortunately, with no new home construction, the last thing I’m seeing in the remod. field is folks upgrading closet/storage areas.

This to shall pass…

-- http://www.federalsaw.com

Yep, my last job was a basement remodel with custom cabinets and bookcases. It would be one thing if I was just having trouble closing sales, but no one has called me about closets since April. In seven years, I have never seen anything this depressing. Closets have always been an impulse purchase anyway, but from talking to remodelers and interior designers, everyone is experiencing the same thing right now. No leads, no sales….it’s a good think I don’t own a gun.

-- I don't make mistakes, only design changes....www.dgmwoodworks.com

I was going to build my own cabinets but I am rethinking it. I had a guy that gave me a price of 8K , 6K less then Kraft Maid’s price a year and a half ago with no counters. The guy just called me today and took another 1K off. I priced what it would cost me to make them and just one sheet of pre-finished maple was $100 a sheet I am looking at 60 feet of carcasses total for uppers and lowers then I have to by the hardware and solid lumber for draws and doors I am thinking I will go for it I have the rest of next week to think about it. OH that includes the counter tops as well. I have to do the install of the cabinets.

-- Sell it here> http://woodworkerslist.com

Gotta remember that an unemployment rate of even 20% means that 80% of people still have jobs. That doesn’t mean they have the jobs they want but the market moves, and things change. Remodeling is really big right now. All of my builders that used to get signs are completely gone. And thats no joke. They have fallen off the planet. Things are changing, the internet is big and our president is not in the business to help us. I am paying off all debt and starting to save money( which isn’t a bad idea in any case). I don’t want to be in this predicament next time it happens. I believe it will get better but it will be different. Things have changed.

-- LAS

It is true that these are tough times, but in Hawaii things aren’t so bad. My income is down from last year, but I’m thankful for the break. There are several projects that I have been pushing aside to keep up with my production schedule last year. Thank goodness I can finally make my bedroom furniture.

These economic swings are always cyclical. It’s awful when you hit bottom, but just like a serious illness each day is just a little bit better than the one before. I had disc injury in 1989 and I didn’t think I’d ever get back on my feet, but I crawled out of that hole and now it’s a distant memory. I’m an unflappable optimist. I’m thrilled to see so many cars on the road with temporary plates. There was a period of many months that I didn’t see one new car on the highway, but now they are everywhere. It’s clear to me that part of the problem is manufactured by the media. They create hype and people run and hide. My hat is off to the folks who said enough of the “sky is falling” I’m going to buy a new car. It’s a start.

I do fairs and trade shows- a big one is coming next week. I’m not sure what to expect, but if the Haleiwa Arts Festival is a harbinger of what’s to come, I should do very well. My artists friends who participated in the festival had better sales than last year. We’ll see. . . .

-- cathyb

The reason for the new car boom is the gov’t buying klunkers for $4500 ;-))

-- Debt is nothing more than the 21st Century's form of slavery.

Great! That’s a stimulus if I ever saw one.

-- cathyb

Too bad it is mainly stimulating foreign car companies….must resist…..keep POV’s to myself…

-- http://www.efcabineture.com/ You can be tired, or you can be broke, but you should never be tired and broke.

Laugh Out Loud rhett. Let’s take the political discussion to the coffee house. hehe

-- LAS

We’re busy! We have plenty of things to build. Got another big job okayed today.

-- Les, Wichita, Ks. (I'd rather be covered in saw dust!)

I’m swamped with work (touch wood)...........booked up into the end of 2010.

-- http://www.furnituremann.ca/

Doom and Gloom in Dennis’s world….one cabinet job in three months and I’ve not got paid for it.

-- http://www.woodsongsfurniture.com

No new cabinet jobs down here in central Texas, but have been doing a fair amount of refacing existing cabinets. Staying pretty busy with that.

New homes are still being built around here, but I dont do buisiness with home builders, prefer dealing with home owners instead.

Dave

-- MISSION FURNITURE-My mission is to build furniture

My mother has owned a truss manufacturing company for 22 years now. The past year or so has been pretty slow, very slow. The company has been loosing money for quite some time and personal funds had to be brought in to keep the company alfloat. About 5 months ago my mother talked to me about closing the doors, for good. So I gave her my opinion, “If we close the doors now, we will have lost all that personal funding that was put into the business. This has got to get better sometime, lets stick it out…..”

Thank the Lord, about a week after that work started rolling in. Since then the company has been very busy. I even have to give up a day in my woodshop and get out there in the plant one or two days a week and get the guys rolling a little faster to get a job finished in time for the home builder. So things have gotten better here recently!

Eight months ago, we were letting people go and this past week my mother and I have been going through resumes because we need to hire a few more hands.

There is only one catch to this work that we are getting, out prices have to be so low that we really aren’t making much profit, kind of just paying the bills. But hey, that’s better than not being able to pay the bills at all!

Our biggest head ache is the fact that people aren’t paying their bills!!!!!!!!!!!!!!!!!!!!!!!!!!!

We are going to make it everyone.

-- Check out my woodworking blog! http://woodworkingtrip.blogspot.com/

This might give you some insight into the situation. From Morningstar about Lowes: Second-quarter results confirm our thesis that the retailer, as well as the entire home-improvement industry, continues to be pressured by lackluster consumer spending and the weak domestic housing market. Still, Lowe’s gained market share in the quarter, which bolsters our view that its competitive position remains strong. While second-quarter sales results were weaker than we anticipated, earnings results through the first six months of 2009 are tracking in line with our full-year expectations. We believe profitability will benefit from disciplined expense control. We plan to re-evaluate our model assumptions after taking a closer look at the numbers and listening to management’s comments on the conference call. For now, we don’t anticipate a material change to our fair value estimate. Total quarterly sales decreased 4.6% year over year, to $13.8 billion, reflecting a 9.5% decrease in same-store sales, partially offset by revenue from new stores. We believe same-store sales were hurt by unseasonable weather in certain markets, as well as fiscal stimulus-aided results in the year-ago quarter. Despite weak same-store sales, Lowe’s was able to gain market share, a trend we expect to continue in any retail environment. Lowe’s was also able to improve its gross margin to 34.8% from 34.3% in the year-ago quarter. We think this was the result of prudent inventory management and upgraded sourcing and distribution systems. However, because fixed costs (such as salaries and rent) increased at a quicker pace than sales, operating income decreased 17.5% year over year, to $1.29 billion (9.3% of sales) from $1.57 billion (10.8% of sales) in the year-ago period. While we see some encouraging macroeconomic trends—single-family housing starts have increased and existing home inventories are being absorbed in many markets—many of these variables remain near historical lows. Consequently, we expect the home-improvement industry to continue to struggle during the next few quarters. Given this outlook, we estimate that Lowe’s will slow expansion to about 40 new stores in 2010. Still, we remain optimistic about Lowe’s long-term growth prospects and believe the firm is well positioned to emerge from this cyclical downturn as a dominant force in the home-improvement market.
Brady Lemos

-- Debt is nothing more than the 21st Century's form of slavery.

TopamaxSurvivor (and all others), here is an update on the cash for clunkers program. I went to a local ford dealership tonight and they told me they have stopped accepting orders for cars with this program 1 & 1/2 weeks ago. I asked him why and he said there are 80 deals he has on the books that they still havent been paid on. I was polite to him and let him know that there are others that are still honoring it and he suggested I go there because he wasnt losing any more money. On CNBC earlier this week they said only 2% of these deals have been paid

Thank you to our government for creating a program to stimulate the economy and not follow up on it.

-- Whether You Think You Can or You Think You Can't, YOU ARE RIGHT!!!

Another local cabinet shop has all his equipment for sale , after 30 something years——-

That dealer falls in line with what I decided 30 yrs ago. I could go bust faster buying materials and working for free than lying in the shade drinking a beer:-)) I saw the same thing on the news here. The dealers are hoping Congress follows though with the Long Yankee Green !!

Too bad about the cabinet shop. Hope he was ready and able to retire.

-- Debt is nothing more than the 21st Century's form of slavery.

Birdhouse building has never been better !

-- John in Belgrave ,(Slideshow http://cid-69bce320c6d8b119.spaces.live.com/ (Website) http://www.extremebirdhouse.com

just finshed one complete bath remodle with vaintys medicne cabinets and bifold door. and finishing up plans on the master bath next week. all is good for now.

-- Keivn S Leadbeater Sr.,FL www.kevinscustomwoodworking.com

I sell hardwoods here in Milwaukee and several my professional furniture maker clients have started getting some commissions lately in the $1k to $3k range per piece. No high end pieces though. I have a couple of clients who make kitchen items like cutting boards and are doing well. Anyone I know doing cabinets or construction is struggling. The hobby woodworkers are starting to buy wood again and that is a plus for me.

Stay positive and keep shaking those bushes for business. You have to work harder to find it these days but it’s out there. Good luck to all.

-- Allen, Milwaukee, WI