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Results from the recent first-quarter survey MDM conducted with Robert W. Baird & Co. are out, and they show some optimism for the second quarter and beyond. While sales for most respondents were still down in the latest quarter, overall revenues are expected to be up slightly in the second quarter. In the first quarter 2010, respondents said sales were down on average about 0.9%. Pricing was flat and gross margins were flat.
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We will present the full results by sector in the next issue of Modern Distribution Management. The results provide some great benchmarking data for distributors in diverse sectors. More than 700 independent distributors and manufacturers were surveyed. (Not a subscriber? Learn more about MDM Premium here.)
In this blog, I am providing a snapshot of the results as they pertain to inventory planning. In the graphic below, you can see the overall expectations for inventory levels from first quarter 2009 through to the second quarter 2010 outlook. Blue indicates a decrease; red indicates levels were the same; and green indicates inventory levels grew.
Baird's analysis of the data indicates that the "phase of de-stocking" has run its course, and that there are signs that some distributors may be starting to rebuild inventories - cautiously. About 26% increased inventory levels in the first quarter of 2010, and 41% decreased. About 38% expect to increase inventories in the second quarter 2010, with only 18% percent expecting to decrease.
Here's a related article on inventory reductions from a March 2009 issue of MDM: Inventory Reductions on Tap, featuring inventory expert Jon Schreibfeder of Effective Inventory Management.
Thank you to everyone who responded to the first quarterly MDM-Baird survey.
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