We’re coming into the Casual Furnishings Premarket in Chicago expecting to be awed by innovative designs and newly expanded showrooms at the Merchandise Mart. Those of us who are paying attention to global business conditions also are preparing for across-the-board price increases; those who aren’t may be shocked.

Our usually optimistic industry is feeling the pinch.

Consumer confidence took another dive in the June expectations index, suggesting the economy may be stuck in low gear. Record high fuel costs, combined with huge numbers of foreclosures as well as international trade changes have created a climate of financial uncertainty. Add to that the unknown of how recent Midwest flooding will affect already inflated food costs.

Retailers’ responses to Casual Living’s exclusive store operations survey reflected those challenges. Nearly 40% expect 2008 sales to stay level with last year. Less than a third expect 2008 sales to be up compared with 2007 numbers.

Despite all these uncertainties at retail, consumers who are complaining about high gas prices and airfare have created a movement toward vacations at home. Such staycations promote investing in fixing up the backyard to host friends rather than taking a trip to Europe or any other location where the currency is strong against our weak dollar. Selling customers on the staycations concept could be the silver lining for our industry.

Planning beyond summer vacations, some casual furniture retailers are opening stores and/or adding to their product mix to balance off-season sales. Meanwhile, a greater number of fabric companies are making performance fabrics to provide more choices for porch and patio, outdoors and in. Some of the smartest outdoor furniture manufacturers are selling to the design and hospitality channels to round out their sales and keep factories busy year-round.

Let’s hope this economic pinch will ease and our industry will stay profitable long after the summer heat cools.