MDM's April Premium Monthly: Trudging Through a Soft Cycle - Modern Distribution Management

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MDM’s April Premium Monthly: Trudging Through a Soft Cycle

Mike Hockett leads into our now-available April Premium Monthly with a state of industrial softness that's lasting longer than anyone would've liked.
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Other than AI, the word that we at MDM have seen and heard most spoken across the distribution landscape since the start of 2024 is some form of softness/softening/softened. This is, of course, in regards to market demand for a wide range of industrial, commercial and building supply markets. Distributors just aren’t seeing the sales volumes that they did during bumper revenue years of 2022 and 2023 which were buoyed by inflated prices.

And while prices haven’t come down since, demand has. 

In the latest quarterly earnings reporting cycle for publicly traded firms, nearly every major distributor’s financial release mentioned the current softened market demand that has led to modest year-over-year sales growth or declines during the January-March period

As detailed in MDM’s 1Q24 MarketPulse report stemming from our Baird-MDM Distribution Survey in early April, the vast majority of the wholesale trade sector expects current conditions to persist throughout 2Q24. The industry still voices optimism about an upswing in market conditions in the second half of the year, but leading economic indicators suggest that things may stay soft longer than anyone would like.

To cite a handful:

  • The monthly ISM manufacturing PMI reverted below breakeven during April to 49.2% as its pricing index reached its highest mark in 2 years and its index for production fell by 3.3 percentage points.
  • U.S. industrial production stalled in April, narrowly missing expectations as factory production fell 0.3% month-to-month.
  • March U.S. construction spending was down 0.2% year-over-year from February’s flat mark.
  • U.S. real GDP growth slowed to 1.6% during 1Q24 — far short of consensus forecasts
  • U.S. labor costs accelerated during 1Q24 at their fastest pace in a year and a half
  • U.S. consumer confidence deteriorated during April for a third straight month

These various indicators led the U.S. Federal Reserve to leave its benchmark interest rate unchanged at its 23-year-high mark of 5.25-5.5%. The nation has long awaited the Fed to issue cuts to that rate, but until those economic indicators give them good reason to, it will continue to push out.

All that said, distributors aren’t panicking. Market sentiment at industry events we attended during April remained upbeat as executives are eyeing better revenues and margins during 2024’s back half and an even better 2025.

Execs can help position themselves for whenever their market demand turns better by attending MDM’s Distribution Sales Summit, to be held virtually on July 10. This FREE one-day conference will present the latest industry research and peer experience to how customers are changing; what agile sales teams are doing differently; and the strategies and tools that top performers are using to thrive in today’s sales landscape. Register at

MDM Premium subscribers can download our April Premium Monthly edition here – now with a fresh new look!

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