Strong growth in the industrial, construction and building materials distribution sectors continued in 2022’s April-June period, according to the Second Quarter Baird-MDM Industrial Distribution Survey, which polled and collected commentary from more than 500 wholesale distribution executives nationwide. (Download’s MarketPulse Report 2Q 2022 for a breakout of all 20 distribution sectors’ revenue and pricing summaries.)
Overall, the data showed that distributors posted an annualized growth rate of 10.4% during 2Q, matching Baird expectations. While it was the first period since 4Q 2020 that the rate didn’t exceed expectations, it still illustrated that distributors carried solid momentum into the second half of the year — which various economists project to witness a considerable economic slowdown. 2Q’s growth rate decelerated modestly from 1Q’s 10.6%. Recent growth peaked in 2Q 2021 at 20.3% — a figure that benefited from favorable comparisons to the height of the COVID-19 pandemic’s business impacts throughout 2020.
The month-to-month dip coincided with the Institute for Supply Management’s Purchasing Managers Index (PMI) having a considerable 3.1-percentage point decline from May to June, with June’s PMI of 53.0 checking in at its lowest since May 2020 during the height of the pandemic.
“Business was extremely strong, really historical months that we had, but we are hearing some caution and pessimism in the marketplace with interest rates and consumer confidence softening,” one surveyed distributor said. “We’re seeing a number of customers saying, ‘We’re busy but concerned about what’s out there.’”
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