4Q16 MDM-Baird Distribution Survey: Optimism Belies Results

Despite 2016 ending on sour note, distributors hopeful for turnaround this year.
Eric-Smith-84x84

2016 ended the way it began – with a whimper. Industry revenues tumbled into the red for the fourth time in five quarters, yet distributors are optimistic for a rebound this year, according to the most recent MDM-Baird Distribution Survey.

Excluding acquisitions, fourth-quarter 2016 revenues were -0.4 percent, well short of the projected 0.9 percent growth for the period. The electrical sector was a weak spot for the industry, offsetting strength in building materials and improvement across several other product categories.

Yet survey respondents are overwhelmingly upbeat. They project revenue growth of 2.3 percent for the first quarter and 3.6 percent for the year, with no sectors forecasting a negative first quarter or 2017.

Most of it is based on hope that the new presidential administration's proposed policy changes will spark growth, even though economists have said the politically agnostic U.S. economy might bounce back at some point in 2017 no matter who won the White House.

"There seemed to be a tremendous freeing up of money late 3Q, early 4Q," said one respondent in industrial gases. "Trump has only increased the exuberance." A respondent in the industrial supply category said the industry is "waiting for the Trump effect to hit. All signs are pointing up, but not any movement yet." Another added, "In general we see the Trump leadership change as positive for business but not forecasting any changes until we see specifics."

The quarterly survey with Robert W. Baird & Co. included responses from more than 500 distributors and manufacturers in diverse sectors. The survey's goal is to gauge business trends and the outlook for the industry.

Read more about the results of the fourth-quarter 2016 survey, including results by subsector, in the Jan. 25 issue of MDM Premium.

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.