The third quarter Baird Industrial Distribution Survey indicates average third quarter year-over-year revenue declines improved ever so slightly compared to the second quarter, with the fourth quarter forecast looking better than current quarter trends against easing comparisons. Pricing and gross margins appear to be holding relatively steady despite competitive behavior in some channels, while inventory levels continue to decline with no restocking expected in the near-term.

"US manufacturing and residential-related markets seem to be in a bottoming process while non-residential trends continue to deteriorate," said David Manthey, Baird's senior research analyst who leads the firm's Industrial Distribution sector research. "Survey results are consistent with our macro view that the US recovery will be slow and uneven."

Survey Details
Baird's Industrial Distribution Research Team collected feedback on third quarter results from approximately 250 independent and captive distributors with combined annual revenue of nearly $50 billion. Key survey findings include:

• Average revenues declines in the third quarter were -15.6 percent year over year compared to -16.0 percent year over year last quarter.
• Respondents' fourth quarter outlook is slightly better than current quarter trends at -8.7 percent year over year against easing comparisons.
• Inventories continued to decline with no near-term re-stock expected in the near future.
• Pricing appears to be holding relatively steady, as average pricing was -1.9 percent year over year in the third quarter compared to -1.7 percent year over year last quarter.
• Gross margins remain relatively stable despite competitive behavior by some smaller distributors, with most respondents reporting no material change versus second quarter.