The 2020 Mid-Year Economic Update_long

Posts By Declan Joyce

George Pattee wants his tenure as 2019 Chairman of the Board for the National Association of Wholesaler-Distributors to be upbeat and positive. The chairman and former CEO of Parksite Inc., a wholesale distributor of building materials based in Batavia, IL, has spent his entire career with Parksite, beginning as a truck loader 47 years ago.

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Since 2010, Robert W. Baird & Co., in partnership with Modern Distribution Management, has conducted quarterly surveys of distributors and manufacturers to gauge business trends and the outlook for the industry. This quarter’s survey polled approximately 500 industry leaders to determine the latest indicators on revenue and pricing based on fourth-quarter 2018 results and distributor and manufacturer expectations for first-quarter and full-year 2019.

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A year ago, at the beginning of 2018, all indicators suggested that the economic and stock market fundamentals were in place for a year of solid growth in the U.S. economy. And while that turned out to be the case for the first three quarters of the year, as 2018 ended the economic signals became more mixed, suggesting that the economy might be entering a period of slowdown. However, whether we are in for a soft landing or something more painful remains to be seen and depends on a number of moving parts.

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Blockchain technology has broad application and disruptive potential across all economic sectors, distribution included. However, issues of cooperation, governance and standardization mean that adoption at scale is likely several years away. This article provides a brief history of blockchain technology and looks at some of its longer-term implications for the distribution industry.

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Some industry analysts feel data transparency is inevitable, and that fear of the Amazon Business Marketplace is overblown; the real focus should be on how to survive in this new environment, not how to keep it at bay. Others see a threat to traditional distribution models. Some distributors are focusing on transitioning to new services-based revenue, away from traditional core product commodities. Justin King, Mark Dancer, Alex Moazed, David Sass and Ian Heller provide their takes on where they think distributors can best focus their resources.

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Robert W. Baird & Co., in partnership with Modern Distribution Management, conducted a survey of more than 500 distributors and manufacturers to gauge business trends and the outlook for the distribution industry in diverse sectors. Here are the latest indicators on revenue and pricing based on third-quarter results and distributor and manufacturer expectations for fourth-quarter 2018 and 2019.

This article includes:

  • Sector Performance
  • Analytics Adoption in Distribution
  • Pricing

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