Distribution's Part in the Economy

Growth in overall macroeconomic activity as measured by Gross Domestic Product (GDP) and growth in the wholesale distribution industry are going to moderate in 2008. That was the message given by Adam Fein in a recent MDM Webcast, Wholesale Distribution Economic Outlook: Adam Fein's First Look at 2008." He said: "I believe they will remain positive but there are some significant risks."
 
In addition to tackling some high-level economic issues, including the key dynamics behind today's economy, the economic outlook and implications for key distribution markets, and what Webcast participants should consider as they plan where their company will go in the next year, Fein talked about the key part distribution continues to play in the U.S. economy.
 
Manufacturing makes up less than 14% of U.S. GDP (or economic activity). At its peak, it was more than a third, Fein said. Wholesale distribution has also been on the decline but for the most part has been "holding its own." In the aggregate, wholesale distribution has been growing faster than GDP. In the 1950s, distribution made up about 7% of the U.S. economy; it's roughly the same now.
 
Still, what is distributed today is different than what was distributed 50 years ago. Today there are fewer distributors of industrial products, but more distributors of products into the service industries that are driving economic growth, including foodservice, commercial office, health care, construction, lodging and others.
 
Overall, "distribution as a whole is still a stable and pretty substantial part of the U.S. economy," Fein said.
 
MDM Publisher Tom Gale also addresses the sometimes unappreciated role of wholesale distribution in his latest Perspective, found here.
 
Order the CD from Fein's Webcast, "Wholesale Distribution Economic Outlook: Adam Fein's First Look at 2008," here.