Recommended Reading: Downward Trend Continues for Distributors - Modern Distribution Management

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Recommended Reading: Downward Trend Continues for Distributors

Eight sectors reported negative growth in the 2Q MDM-Baird Distribution Survey.

The second quarter marked the third consecutive quarter of negative growth for distributors – continuing the downward trend that began last year, according to Economy Stuck on the Bottom in 2Q, which includes the results of the most recent MDM-Baird Distribution Survey.

Excluding acquisitions, distributors averaged -0.2 percent revenue growth in the second quarter – far from the 1.5 percent they projected for the quarter in the 1Q survey.

In the industrial supply category, companies finished with an average of -2.1 percent revenue growth in the quarter. Fasteners was the only sector with positive growth.

“We continue to hear from analysts and forecasters that the second half of the year will be better than the first half, yet we see nothing in the market that would indicate such an improvement,” said one survey respondent.

Among the 20 product sectors included in this quarter's report, respondents in the building products and facilities maintenance category again outperformed the rest of the industry, and pool & spa posted the strongest revenue growth (7.9 percent).

Eight sectors saw negative revenue growth in the second quarter (up from seven in 1Q): waterworks (-0.1 percent), safety (-0.6 percent), MRO – manufacturing (-1.7 percent), welding hardgoods (-2.5 percent), hoses & accessories (-2.8 percent), mechanical/power transmission (-3.4 percent), metalworking/cutting tools (-5 percent) and industrial/energy PVF (-5.6 percent).

After another period failed to meet expectations, survey respondents now project 1.9 percent revenue growth in the third quarter and 1.3 percent revenue growth for 2016 – the latter of which has been revised downward from a previous expectation of 2.2 percent revenue growth for the year.

Read more about distributors' second-quarter revenues in Economy Stuck on the Bottom in 2Q.

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