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As the U.S. economy approaches its 100th straight month of economic expansion, the distribution industry remains upbeat about fundamentals for the year ahead. But the ongoing trade war, pricing pressures, raw material costs, and an increasingly likely broader economic slowdown are shaping three key themes, based on MDM’s 2019 Distribution Industry Outlook Survey:
- Manage the cycle
- Leverage limited resources
- Develop talent strategically
In our webcast tomorrow, Tom Gale and Ian Heller will outline each of these three areas and the survey responses behind it. Baird Senior Analyst Dave Manthey will provide a snapshot of macroeconomic conditions as we move into 2019, and dig even deeper into our latest joint MDM-Baird quarterly survey of business conditions across four major sectors: Industrial Supply, Industrial Gases, Building Products & Facilities Maintenance, and Electrical & Datacomm.
Ranga Bodla, Head of Industry Marketing at Oracle NetSuite, will join the discussion and provide insight from trends across their customer base, and participate in the Q&A session to wrap up the webcast.
Here are a few survey highlights:
- Three-quarters of industry leaders expect sales growth of 5 percent or higher in 2019, the same as in 2018, although the percentage who anticipate growth of 10 percent of higher has moderated from about 28 percent to 20 percent.
- The industry has two clearly defined priorities for the year ahead: revenue growth and increasing profitability.
- Companies plan to source the revenue increases they’re aiming for in 2019 primarily by adding new products, improving e-commerce and seeking additional business from existing customers.
- The number who plan to drive revenue by increasing the size of their sales team has dropped from 33 percent in 2018 to just under 15 percent.
- Technology continues to be a concern although, as other MDM research throughout 2018 has indicated, the level of attention being accorded to it may lag behind industry realities.
- The top three software technologies companies say they plan to invest in during the coming year are the same as in 2018: e-commerce, customer relationship management (CRM) and pricing.