2020 Outlook and Emerging Trends to Watch - Modern Distribution Management

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2020 Outlook and Emerging Trends to Watch

Happy New 2020 Year. Holiday copper metallic numbers 2020 and co

I haven’t talked with a distribution executive in January – in Europe or North America – who had a good thing to say about the last two weeks of business in 2019. The likely culprit was having Christmas and New Year’s holidays fall mid-week; customers, employees and revenues took time off. Manufacturing employment declined slightly in December as well but changed little in 2019 after growth the year before.

And while it’s too early to call January, this year appears to be starting off on a more optimistic foot — from both the latest economic data as well as industry sentiment. In our recent 2020 Annual Distribution Outlook webcast, Baird Senior Research Analyst Dave Manthey offered a more optimistic picture than a year ago across industrial and construction sectors, as well as the broader economy. Summary: The odds of a recession are going down, while leading indicators and industry sentiment point to modest growth for 2020 overall.

But tariffs and pricing are continuing concerns, based on the fourth quarter 2019 survey MDM has partnered with Baird on for more than 10 years now, and recapped in our lead report in this issue. This survey is the strongest set of indicators for industrial distribution sectors for both quantitative and qualitative feedback from more than 500 distribution executives representing more than $100 billion in revenues. It provides valuable insight on pricing trends, key macroeconomic trending and more specific construction and industrial market trending.

In our webcast, Manthey noted that weakness in industrial product categories has been expanding beyond heavy durable goods manufacturing into broader commercial manufacturing sectors. He added that there may be some inventory de-stocking taking place in response to the weakness appearing across the board now. But overall, his analysis was positive for strengthening market conditions as we move through the year.

Key 2020 Theme: Talent

We also discussed emerging trends in this webcast, which we boil down from this quarterly survey and our ongoing research through the year. There are a number of crosscurrents that continue to grow. The industry is maturing as distributors develop digital and analytics capability as leaders reshape and transform their companies to more data-driven organizations.

The real differentiators in 2020 are in the talent arena. This is not a new trend, but every organization is challenged to stay ahead of the accelerating shifts in the workforce. How will you transfer the knowledge of those on your team who know the most about your customers and markets to the next generation? Solve that equation first. Companies that proactively manage their knowledge and culture shifts this year will be best positioned for growth, given the modest growth forecast.

View the 2020 Annual Distribution Outlook webcast.

This blog is an example of MDM’s Premium content. Read the rest of the January 25th issue here.

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