Adam Fein Addresses Inflation-Fueled Growth vs. Real Growth
January 25, 2008
Wholesaler-distributors in varied sectors have been seeing strong double-digit top-line revenue growth. While the economic expansion increased unit sales, recognize that unusually high commodity prices have made revenue growth easier to achieve in recent years. In Adam Fein's recent MDM Webcast, Wholesale Distribution Economic Outlook,"he addressed this issue.
Fein, president of Pembroke Consulting, presented as example the hardware, plumbing, heating and cooling distribution sector, which has seen flat growth year-over-year. But once adjusted for inflation, unit growth was negative.
"I call that the growth gap,"he says. In this case, the gap was 5.3 percent. "I can't predict commodity prices any better than anyone else can. But what it does say is there has been ...