The 2020 Mid-Year Economic Update_long

Day: June 23, 2009

Survey: Wholesalers, Manufacturers Expect End of Year Recovery

Manufacturers and wholesalers are starting to see positive signs for economic recovery, according to the third annual RSM McGladrey Manufacturing and Wholesale Distribution National Survey. Respondents to the survey say they expect their companies to rebound from the current recession beginning in late 2009 (46%) and early 2010 (44%). In general, companies predict an earlier rebound for their own businesses than for their industry or the U.S. economy.

Survey results indicate a significant year-over-year decline in the reported health of companies, however. Forty percent of respondents reported their business as "declining" this year, as compares to 12% in 2008. Only 9% reported their companies as "thriving and growing."

More than 920 manufacturing and wholesale distribution ...

Bunzl Sales Up 17%

London, UK-based Bunzl plc, an international distribution and outsourcing group, reported sales for the six months ending June 30, 2009, will be up 17%, with core sales slightly down.

Sales in the UK and Ireland are lower than level seen a year ago. As a result, cost reduction measures have been implemented. In Continental Europe, sales have also softened due to general weakness in the economy.

North American sales increased with new business wins and increased business with current ...

Schneider Electric Buys Brazilian Manufacturer

France-based Schneider Electric has acquired Microsol Tecnologia, a Brazilian manufacturer of UPSs, voltage regulators and accessories for power protection. In 2008, Microsol generated net sales of BRL 65 million (US$32.4 million) and employed 500 people.

With this acquisition, Schneider Electric strengthens its presence in Brazil, and expands its product and solution development capability specifically for the Brazilian market.

Microsol Tecnologia will be integrated into Schneider Electric's IT Business. This acquisition meets Schneider Electric's Return on Capital Employed criteria.
Schneider Electric has operations in more than 100 ...

Best Practices in Selling Services

Recently, the Wall Street Journal ran a best practices article with lessons distributors can apply to their own services businesses: "Beyond Products: More manufacturers are branching out into the service business. Here's how to make the move successfully."

One of the key points made in the article: Many manufacturers who have moved into services have gone without a clear strategy. I'm sure some distributors will relate to the challenges outlined, including trying to sell services that were previously free (See Emerging Model: Fee-for-Service on how Cardinal Health and other drug distributors try ...

Study Questions Whether Cutting Back on Tech Investment Now is the Right Move

With the timeline for economic recovery still uncertain, distributors and manufacturers are still looking for ways to cut costs, according to RSM McGladrey's fourth annual Manufacturing and Wholesale Distribution National Survey. But those cuts may be coming at a cost, particularly as they relate to information technology (IT).

Of the more than 920 executives responding to the survey, almost 90% reported that IT is a critical component of their business operations." At the same time, about half said they are holding off on upgrading systems or enhancing programs already in place to keep costs down.

In the press release about the result, RSM McGladrey wrote: "This type of short-term action may prevent companies from realizing the benefits IT systems can offer."
Cutting costs ...