The 2020 Mid-Year Economic Update_long

Day: September 10, 2007

Machine Tool Consumption Up 5.3% YTD

July U.S. manufacturing technology consumption totaled $271.37 million, according to AMT - The Association for Manufacturing Technology and AMTDA, the American Machine Tool Distributors'&nbsp ; Association. This total, as reported by companies participating in the USMTC program, was down 22.0% from June, and down 9.5% from the total of $300.01 million reported for July 2006. With a year-to-date total of $2,254.79 million, 2007 was up 5.3% compared with 2006.
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These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.
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Typically July and August produce fewer orders relative to other months during the year as a result of the reduction of hours worked and partial plant closings," said ...

Monthly Wholesale Trade: July 2007

July 2007 sales of merchant wholesalers, except manufacturers'sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $359.0 billion, up 0.8 percent from the revised June level and were up 7.2 percent from the July 2006 level. The June preliminary estimate was revised downward $0.7 billion or 0.2 percent.
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July sales of durable goods were virtually unchanged from last month and were up 4.3 percent from a year ago. Compared to last month, sales of lumber and other construction materials were down 3.2 percent. July sales of nondurable goods were up 0.1 percent from last month and were up 10.0 percent from last year. Sales of drugs and druggists' sundries were up 1.4 percent from last month.
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MDM Inflation Index: July 2007

Modern Distribution Management's July Inflation Index, which measures a cross-section of industrial supplies, was up 0.23% from the previous month, and up 3.16% from July 2006.

Summary of&nbsp ; MDM Inflation Index for the past 12 months:
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July 2007 Index 272.4
June 2007 Index 271.7
May 2007 Index 271.2
April 2007 Index 270.8
March 2007 Index 269.6
February 2007 Index 269.4
January 2007 Index 268.7
December 2006 Index&nbsp ; 267.1
November 2006 Index 266.5
October 2006 Index 265.9
September 2006 Index 265.6
August 2006 Index 265.2
July 2006 Index 264.0

Please click below to view a print-ready pdf of the&nbsp ; MDM Inflation Index for July 2007, listing the ten individual product categories ...

Commentary: Economic Sky Still in Place

We are at a point again in the business cycle where the national media hold a powerful tool and heavy responsibility when it comes to accurately reporting on economic trends. The danger is that one-line headlines and sound bites about recession can spook U.S. consumers into their shells and create the proverbial self-fulfilling prophecy.

The first three articles in this issue offer a few different viewpoints from economists on the state of the economy, the impact of the credit crunch," and what our readers might consider based on the current climate. We do not predict the falling of the sky. And as economist Alan Beaulieu notes in the cover story: "The U.S. economy is in better shape than most people think it is."

That's not to discount the very tough conditions ...

Hagemeyer NA Releases Industrial Catalog

Hagemeyer NA has released its 2007-2008 Industrial Products catalog. The 900-page book features 28,000 items.
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This catalog represents an important part of Hagemeyer's marketing and growth plans and provides our valued customers with a broad array of high-quality products to meet their everyday business needs," says Brad Pulver, vice president, Product Strategy. "The catalog also showcases several of our value-added services that set us apart from our competition, including; Web-based ordering at, technical services, vending solutions, inventory management solutions, order automation tools and storeroom management capabilities.
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The catalog is organized in the following product categories:&nbsp ;

  • Hand ...

News Digest 3717

Airgas, Inc., Radnor, PA, has acquired Dantack Corp., a Grand Prairie, TX-based safety distributor with branches in Columbus, OH, and Richmond, VA. The business generated more than $18 million in sales in 2006. Airgas'safety distribution business had $438 million in sales in fiscal 2007 through telesales and field-based safety specialists within its regional companies. More

The Home Depot has completed the sale of HD Supply to a trio of private equity firms -Bain Capital, Clayton Dubilier & Rice, and Carlyle Group. As announced earlier, the terms were as follows: Purchase price of $8.5 billion, The Home Depot to own a 12.5 percent equity interest for $325 million, ...

Labor Productivity Improves in Wholesale Sector 2005-2006

Labor productivity -defined as output per hour -increased 4.3 percent in wholesale trade in 2006, according to the U.S. Bureau of Labor Statistics. From 1987 to 2006, labor productivity increased at the following average annual rate: 3.5 percent.
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2005-2006 Change in Wholesale Trade
Output per hour grew 4.3 percent, as output increased 6.6 percent and hours advanced 2.2 percent.&nbsp ; Labor productivity rose 5.1 percent in durable merchant wholesalers and increased 2.7 percent in nondurable merchant wholesalers.

Labor productivity rose in 15 of the 19 detailed wholesale trade industries in 2006, as output grew in 17 industries while ...

NAW Takes Action on Liability Case

Distributors may be better protected from strict liability actions if a Supreme Court case in Ohio is overturned.

The National Association of Wholesaler-Distributors is one of nine organizations that filed a friend of the court" brief in the Supreme Court of Ohio in a case focused on the retroactive application of the doctrine of strict liability in product liability actions brought against non-manufacturer product sellers, including wholesalers, distributors and retailers.

Strict liability is based on the condition of a manufacturer's product rather than the conduct of the defendant.

According to NAW President Dirk Van Dongen, the association views DiCenzo as a "major, even seminal case that carries with it profound legal and economic ramifications for ...

10 Things to Consider in a Non-Compete

More frequently, employers are asking or requiring employees to sign non-competition agreements -employment contracts that restrict the rights of employees to set up shop across the street, or take your trade secrets with them when joining a rival.
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After training and grooming a green employee into a highly productive and valuable member of the team, employers are frequently frustrated to learn that the employee is now their chief competitor.
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Of course, it's a free country and people are allowed to make a living any honest way they can. Balancing those two competing philosophies is what judges are often called upon to do.
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If you are considering establishing a non-competition agreement for your employees, here are 10 things you should ...

A Credit Crunch for M& A?

Tight credit markets are affecting sizable deals in progress and may dampen historically high valuations. But it's unclear whether the current state of credit will curb interest in distribution by financial buyers.
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Firms making sizable acquisitions are now having a tough time getting the loans they need to pay the agreed-upon purchase price.
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As a result, several billion-dollar-plus deals are being renegotiated, including the recent HD Supply deal. The trio of private equity firms buying the $12 billion unit is now paying $8.5 billion, instead of the original price, $10.3 billion.
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Seemingly overnight, banks have find it tougher to spread the risk of a loan largely due to a drop in interest from outside investors in buying some of that ...

Transform a Downturn into a Strategic Opportunity

During an economic slowdown, a siege mentality" is understandable but not always productive, says Steve Deist of Indian River Consulting Group. Though many industries are still seeing growth, some -including the housing industry -are struggling. This is a timely excerpt from a piece by Deist on how to turn a downturn into a strategic opportunity.
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No. 1 Focus on the Other Guys
Customers, employees, competitors and suppliers are facing many of the same challenges you are. Many are probably playing defense and are reluctant to make long-term commitments. They likely have reduced expectations of performance in profitability and sales growth.
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Commit to sustained and improved customer service. ...

Weighing In on the Economy

To gauge the effect of economic trends on distributors, MDM tapped two economists to gain a snapshot of current economic conditions. MDM spoke with Alan Beaulieu of the Institute for Trend Research (603-226-9331,, and Bill Dunkelberg of the National Federation of Independent Businesses.
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What is the state of the economy?
Alan Beaulieu: The U.S. economy is in better shape than most people think it is. We have largely absorbed a significant blow in the form of the downturn in the housing market.

It is not hard to imagine that in past decades this would have sent us into a recession, but this time we have taken the hit" and are continuing to grow, albeit at a noticeably slower pace. To put this in context, the decline in ...

PetroLiance Acquires AV Lubricants

PetroLiance LLC, formed last year through the consolidation of four of the nation's largest ExxonMobil distributors, has completed its first acquisition. The company has purchased Columbus-based AV Lubricants Inc.
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AV Lubricants is a provider of lubricants to the aviation industry and to mining operations in Ohio, Kentucky and neighboring states.
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PetroLiance has major facilities in Columbus, OH, the headquarters of AV Lubricants. &nbsp ; PetroLiance was formed in 2006 through the consolidation of Boncosky Oil Company of Chicago, IL, Commercial Ullman Lubricants Company of Ohio, Lubricant Technologies LLC of North Carolina, and Young Oil Company Inc. in south Florida. The company offers ExxonMobil products along with a growing array of ancillary products and ...