Premium Monthly: Mixed Signals, Cautious Optimism Continues

MDM hit the road in October to cover several industry events. Here's what we learned about what lies ahead for distributors.
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Flatline demand for JanSan products, margin management and labor challenges continue to top the list of concerns I heard on the road during October as our MDM team has covered the high season of distribution industry meetings. We’ve been gathering intel at the International Sanitary Supply Association, Power Transmission Distributors Association, Affiliated Distributors and NetPlus Alliance, as well as MDM’s own SHIFT Conference Sept. 25-27. (Read more in MDM’s latest Premium Monthly.)

Overall, I picked up on good energy at events during the month, even though attendance this year has been down 20% on average. Key commentary themes include “cautious optimism” for expected product demand in the fourth quarter and early 2023. At ISSA, I was somewhat surprised to hear several JanSan industry executives mention a “flatline” in demand compared to its 2020-2021 pandemic-driven spike. Many assumed demand for JanSan products would continue to decline back to its 2019 levels. But it appears demand levels have already retreated to that level or even lower, as several outlook sessions detailed how remote and hybrid working environments have resulted in paltry demand from commercial facilities that hasn’t been offset by higher demand in household cleaning products.

Conversely, I was encouraged by the outlook voiced by executives at NetPlus’ and PTDA’s Industry Summits, as distributors and manufacturers at the latter told me demand was strong through the end of October across the majority of customer segments and that they are expecting strong fourth quarter performance. Several mentioned the ‘If we can get it, we can sell it’ notion, noting that while supply chains have smoothed out for certain product verticals, others are still seeing snags. But above all, demand is there for industrial products.

The 2022 PTDA Summit was held Oct. 27-29 in Nashville.

Exclusively for our Premium Members, our October Premium reports (collected in this issue) began the month with a pair of pieces that recapped sessions from SHIFT, with Associate Editor Brad Star examining Jason Hein’s exploration of “The Culture Minefield in Digital Transformation,” and my analysis of the “What is Next in Distribution: The Future of Selling” keynote delivered by Gartner’s Maria Boulden. October also featured MDM’s third quarter Baird-MDM 3Q Industrial Distribution Survey results, captured in our 3Q MarketPulse report (access here). Associate Editor Mark Powell’s recap of distributors’ commentary on talent recruiting and retaining efforts illustrates that the industry’s labor situation remains very challenging.

Our October Premium Monthly issue also includes articles on retooling an incentive program in times of market correction; margin management in inflationary environments; my analysis of somewhat opposing market optimism in Fastenal and Motion Industries’ 3Q earnings calls; and a look at the latest wholesale trade data from the U.S. Census Bureau and Bureau of Labor Statistics.

The stage at NetPlus Alliance’s “All In” Annual Meeting.

Click here to download and read MDM’s October 2022 issue of Premium Monthly. If you’re not already a Premium subscriber, you can change that by clicking here.

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