Furring refers to a process. Furring strips can be boards, thin laths or drywall shims. When you fur-out a wall, you’re extending the depth of the joists or creating a structure on which to install the drywall panels. If you fur-out a basement wall, you might use dimensional studs, installed flat on the concrete wall. If you fur-out uneven studs, you may use drywall shims that are less than 1/4 inch thick. The direction that you install the panels may not be relevant to the direction of the furring strips.
Generally, if you install drywall panels perpendicular to the studs on a traditional 8-foot wall, you will have fewer seams to tape. This is important, because seams are not only weak areas, but they are also more likely to show after the wall is taped and painted. For this reason, drywall contractors will install the longest drywall panels possible. For instance, if your wall is 8 feet high and 12 feet long, you can install two 4-foot-by-12-foot panels perpendicular to the studs and cover the entire wall, leaving only one horizontal seam to tape between panels.
Drywall panels have factory edges along their long sides, which feature a bevel that creates a depression to hold joint compound. But the ends of the panels feature raw cuts, with no paper covering and no bevel. Contractors try to avoid installing panels so the ends meet, but that’s not always possible. When two drywall panel ends meet, they form a “butt joint” that is more likely to show after painting the wall. By hanging the panels perpendicular to the joists, the contractor can install furring shims on joists adjacent to the joist where the butt joint falls. This creates a slight depression over the butt joint, which helps hide the seam after taping.
Create a drywall layout prior to hanging the panels. If you can install the panels perpendicular to the joists or studs and minimize seams and butt joints, do that. The direction of the panels is less important than the number and length of seams you must tape, and the potential for creating butt joints. You can change panel direction, if needed, to keep butt joints from falling in the center of the wall. By creating a layout on paper before you hang the panels, you can analyze the panel configuration. Use the largest panels you can safely handle, and avoid cutting and installing small sections of panels at the tops of your walls.