As the year wraps, index shows sentiment rising toward a better 2026

HIGH POINT — There’s a sense of optimism among retailers and manufacturers as 2026 approaches with improved sentiment for some of the key metrics such as business expectations for the next six months and capital investing.

Overall, participants in the latest Furniture Today Home Furnishings Sentiment Index survey rated the current state of business higher than the previous quarter, while also improving their outlook for how the year will end.

Prospects for the next six months moved into the positive range for the first time since the first quarter, with a 103 score as more respondents projected conditions improving vs. those who see them worsening.

See also:

• Home Furnishings Sentiment Index falls on current factors, shows optimism longer range (Q3)
• Increased uncertainty: Falling sentiment index reflects furniture industry outlook in Q2

Plans for capital investments rose by 13 points to 75, coming within a few points of the high score of 82 posted in the Q1 index. Meanwhile, the employment forecast stayed relatively even, with more respondents still expecting a reduced workforce vs. those who see it increasing over the next six months.

The view on the current state of business is still skewing heavily toward a poor or fair assessment, with just 1% giving the home furnishings business an excellent rating, but the overall rating rose to 46 on a scale of 100 from last quarter’s low of 38.

The sunny outlook that respondents showed in the first quarter of the year, when sales projections were at their highest, hasn’t returned yet, although there was improvement, with expectations for 2025 sales rising 12 points on the index to 78.

Uncertainty about consumer demand continues within the industry; the index for the quarter dropped by five points to 83 from the third quarter’s 88, but it did not dip to the year’s low score of 70 posted in the second quarter.

Tariffs, the state of the housing market and mortgage rates remained top-of-mind with respondents.

The survey found 91% cited tariffs and 81% flagged housing issues as factors they are watching for their business, although the numbers dropped slightly from the third quarter’s 93% for tariffs and 85% for housing.

Other factors on the watch lists were:

• consumer sentiment, mentioned by 75% of respondents
• inflation, 60%
• supply chain issues, 46%
• labor market, 38%.

Labor rose by 9 percentage points for the quarter, and monetary policy also picked up some interest, rising to 30% this quarter from 25% last quarter. Immigration policy remains the issue of least interest, dropping to 14% from 17% previously. Sentiment about geopolitical conflicts remained the same with 24% once again mentioning it something they’re tracking.

Furniture Today is conducting its Home Furnishings Sentiment Index survey on a quarterly basis, polling retailers, suppliers/manufacturers and others aligned with the home furnishings industry, including designers, reps and consultants. The most recent survey was taken between Nov. 5 and Dec. 2. The next HFSI survey will publish in March 2026.