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HARDI's monthly Targeted and Regional Economic News for Distribution Strategies (TRENDS) Report showed growth in five of seven U.S. regions, three of which experienced double digit improvement compared to May 2010. Canada finally snapped a six month annual growth rate decline with its strongest month since November 2010.
Inventory levels were up in every North American region. Days Sales Outstanding continued its fourth consecutive month of increases. One of the most positive figures was a 7 percent increase in distributor productivity reflected by sales per employee.
"Despite a persistently weak housing market, the overall economy is in noticeably better shape than one year ago and this has reflected positively on member sales in May," said HARDI economist Andrew Duguay of the Institute for Trend Research. "The overall sales picture in May was positive, but we must not forget that the overall economic picture at the moment is one of slowing growth and the annual growth rate for member sales has been moving lower from the 11.3 percent peak in March."
"Things are definitely better than last year, but 2011's growth continues to be uneven and inconsistent in rate," said Talbot Gee, HARDI executive vice president and COO. "Fundamentals are even more important this year so I will be watching productivity numbers very carefully as the summer goes on. We'll soon learn a lot about which distributors right-sized during 2008 and 2009 because I don't see volumes growing enough this year to justify significant expansions of distributor staff or infrastructure."
Gee continued, "High-efficiency unitary sales are not significantly recovering from its first quarter drop with the start of the cooling season while sales of "dry-shipped" R-22 units continue to steadily increase, as do sales of ductless units."