As we at MDM continue to hear more distributor sentiment of cooling demand for industrial, commercial and construction/building supply products, the latest wholesale trade data from the U.S. Census Bureau indicates weakened revenue expectations for the second half of 2023 and 2024.
That Bureau data, released July 10 and compiled for MDM by Brian Lewandowski, Executive Director of the Business Research Division at the Leeds School of Business, University of Colorado Boulder, showed a second consecutive month-to-month regression, and a considerably bigger one.
July 13 Webcast: MDM’s 2023 Mid-Year Economic Update
Reflecting wholesale trade expectations through May 2023, the new data shows that wholesale distributors — as a whole — now expect 2023 full-year baseline revenues to be down 0.8% vs. 2022. That’s a notable flip from a month earlier when expectations were for a 0.6% 2023 revenue increase.
Of the 19 wholesale trade industries the Bureau tracks, 14 saw 2023 expectations move more pessimistic during the month of May vs. April. Of the four others, one was flat, two moved slightly more optimistic (+0.1 to 2.0 percentage points) and one grew moderately more optimistic (+2.1 to 4.0).
Meanwhile, the overall outlook for 2024 revenues likewise moved less cheerful. The Bureau’s data shows that, through May, the wholesale trade sector now expects 2024 revenues to increase 3.5%, down from 4.5% through April. Of the 19 verticals, 16 moved more pessimistic in May vs. April.
With wholesale trade encompassing major nuances within each industry, here is how those 19 verticals trended for 2023 and 2024 revenue expectations in May vs. April, in order of largest to smallest industry:
| Industry | 2023 Expectations through May vs. April | 2024 Expectations through May vs. April |
| Oil & Gas Products Distributors | +2.1% | +1.4% |
| Pharmaceutical Wholesalers | -0.1% | -0.8% |
| Grocery & Foodservice Distributors | -2.8% | -0.6% |
| Electrical & Electronics Wholesalers | -1.7% | -2.3% |
| Industrial Distributors | -2.5% | -2.9% |
| Motor Vehicles & Parts Wholesalers | -2.5% | -1.2% |
| Miscellaneous Durable Goods Distributors | -2.7% | +0.3% |
| Other Consumer Products Distributors | -1.4% | -0.2% |
| Computer Equipment & Supplies Distributors | +1.8% | -0.1% |
| Commercial Equipment & Supplies Distributors | 01.0% | -0.7% |
| Agricultural Products Distributors | -6.4% | -2.8% |
| Metal Service Centers | -4.9% | -2.8% |
| Building Material & Construction Distributors | -0.9% | -3.7% |
| Hardware, Plumbing & Heating Equipment/Supplies Distributors | +0.4% | -1.8% |
| Beer, Wine & Liquor Distributors | -3.4% | +1.0% |
| Apparel & Piece Goods Distributors | -5.3% | -1.5% |
| Chemicals & Plastics Distributors | +0.6% | -0.1% |
| Furniture & Home Furnishing Distributors | 0.0% | -3.8% |
| Office Product & Paper Distributors | -2.5% | -0.9% |
| Wholesale Trade (All) | -1.3% | -1.0% |
Monthly Revenues & Inventories Update
The Census Bureau’s monthly wholesale trade report showed that May 2023 sales of merchant wholesalers — except manufacturers’ sales branches and officers, after adjustment for seasonal variations and trading day differences but not for prices changes — were $650.2 billion, down 0.2% from the revised April level and were down 4.0% year-over-year.
The Census Bureau’s “Real Dollar” estimates for the wholesale trade sector — which factor in price indexes from the Bureau of Labor Statistics — showed that May 2023’s “real” revenue was $565.2 billion, up 1.1% from April and up 2.0% year-over-year. The monthly gain snapped two-straight months of decline (-0.7% March to April, -2.2% February to March). Real revenues of durable goods improved 0.7% from April to May, while nondurable goods real revenues improved 1.4%.
On the inventory side, the Bureau said total inventories of merchant wholesalers were $913.7 billion at the end of May, virtually unchanged from the revised April level. Total inventories were up 3.7% from the revised May 2022 level.
The May 2023Â inventories/sales ratio for merchant wholesalers was 1.41, down from 1.40 in April and up considerably from 1.30 in May 2022.
Employment Update
According to the U.S. Bureau of Labor Statistics, June wholesale employment decreased 0.59% vs. May, compared to gains of 0.54% in manufacturing’s and 0.29% in construction. That put wholesale trade at 16th out of the 20 sectors it tracks for employment.
On a year-over-year basis, June wholesale trade employment was up 1.35%, narrowly ahead of manufacturing’s 1.33% and trailing construction’s 2.55%. That placed wholesale trade at 13th out of 20 sectors.
Here’s my June wholesale data breakdown
