A closely-watched survey by a High Point, N.C. accounting and consulting firm showed a drop in business last year for residential furniture manufacturers and distributors.

New orders were 4 percent below 2006 levels, according to Smith Leonard PLLC, which said that about 70 percent of survey participants reported a drop in orders in 2007 compared to the year before.

The drop in December was even more precipitous — down 8 percent, matching the percentage decline in November.

“We expect January results to continue to show weakness in the industry as a whole,” wrote Ken Smith, the study’s lead author. “We do not expect much of a turnaround until at least later on in 2008.”

“It’s time to hunker down and hold on until times get better,” he continued. “We believe they will.”

Clayton is home to Furniture Brands International Inc., the country’s No. 2 residential furniture manufacturer. The company predicts a turnaround this year after losing $45 million in 2007, but analysts worry that a continued deterioration in the overall industry could complicate those plans.  

Furniture Brands’ austerity program last year included trimming advertising costs by 2.3 percent, to $70.3 million, as well as closing five manufacturing facilities and 18 retail stores.