Head-spinning times | Jennifer Marks

The word “unprecedented” has gotten quite a workout over the past four years, and justifiably so.

This summer will mark the fourth anniversary of former President Trump’s tariffs on Chinese imports, a serious development that added costs to home textiles merchandise. Anyone who hoped the tariffs would be rescinded with the arrival of a new administration has thus far been disappointed.

Then came Covid-19, then shutdowns, then a boom in spending on home goods, then the colossal cock-up of the supply chain system, which is with us still. Now we have added a war in eastern Europe and inflation into the mix.

Each of these is a once-in-a-career event for any business, but we live in an era when one unprecedented disruption has cascaded on top of another.

Shifting through the plethora of prognostications and forecasts out there brings to mind that Schoolhouse Rock ditty “Conjunction Junction,” which advises us the “and, but and or will take you pretty far.” Because “and” and “but” are frequent qualifiers in the current environment.

The National Retail Federation last month reasserted its rosy forecast that retail sales for 2022 will increase between 6%-8%. The reasons: job growth AND wage increases AND strong household savings. BUT with inflation reaching a 40-year high AND strong consumer demand running up against restricted supply, the picture becomes more complicated.

There were more conjunctions swirling through a pair of Houzz surveys tracking residential renovation market activity.

Renovation activity this year looks healthy, with 55% of homeowners planning to renovate, 46% planning to decorate AND, for the first time since 2018, homeowners’ planned spend jumping to $15,000, up $5,000.

BUT professionals in the construction, architectural and design services sectors are tempering their expectations. Lengthy backlogs persisted in Q2 AND the pros worry future business may stall due to inflation, supply chain delays and rising costs for materials.

Similarly, consumer sentiment has become muddled. The April Consumer Confidence Index found that consumers’ short-term outlook for income, business and labor market conditions ticked up to 77.2 from 76.7. BUT their assessment of their present situation fell to 152.6 from 153.8 in March. Vacation intentions cooled BUT intentions to buy big-ticket items rose, AND purchasing intentions are down overall from recent levels.

Suppliers in every category of home textiles have reported that retail orders began falling off earlier this year. Raw material prices had been rising for months and freight costs remained high – and everyone knew that double-digit consumer spending on home furnishings had to run its course at some point.

BUT there is still hope that if inflation can be constrained, the housing market will deliver a few years of Gen Z-driven growth.

Dizzy yet?

MORE

NRF: Economy has ‘strong momentum’ despite challenges with inflation, Ukraine

Home renovation activity and spend hits four-year high | Houzz survey

Houzz: Home renovation, design professionals adjust business expectations from Q1 peak

Consumers lose confidence after moderate gains in March