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Shrinking Distribution Sectors

In his recent Webcast, Growth Planning for 2010: Economic Update with Adam Fein (still available here) Pembroke Consulting's Adam Fein talks about the size of the wholesale distribution industry. Many of the sectors, he said, have shrunk considerably. Not surprisingly, one of these is the building material and construction sector, down $56 billion in overall revenues from 2006, when the sector recorded $143 billion in revenues.

Other sectors that are smaller than they used to be on a revenue basis include: metal service centers, motor vehicles, furniture, hardware, plumbing and HVACR.

Fein says that though revenues have shrunk in these sectors, we haven't seen a corresponding decline in the number of companies or branches, or in employment. He says: "So the question that I wonder about is do we still have too much excess capacity? Are too many companies hanging around waiting for the rebound? The recovery that is coming may not be strong enough to support all the companies that have been hanging on. There's still a potential for a shakeout during the recovery period."

Fein presents this and other benchmarking data in his new 2010 Wholesale Distribution Economic Reports, now available in the MDM Store. Order here.

 

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