Distributors Bullish on COVID Rebound in 2021—NetPlus Industry Outlook Survey

While the recovery well is underway, the NetPlus quarterly survey also said the labor shortage was a cause for concern going forward.
Advance economic indicators February 2021

According to a recent survey, NetPlus Alliance distributor members are optimistic about their sales growth this year as the recovery from last year’s pandemic continues.

NetPlus Alliance, the Lockport, New York-based North American industrial and contractor supplies buying group, released the results of its quarterly NetPlus Alliance Industry Outlook survey on Monday. Among the findings, the report found that 35% of the distributor members reported a significant increase (8% or more) and 25% reported moderate gains (3% to 7%) in 2021 first-quarter sales compared to 2020.

Purchases through NetPlus Alliance suppliers in the first quarter of 2021 were up more than 13% over the same period in 2020, and 25% better than the first quarter of 2019.

The primary factors for the increases included ongoing COVID-19 recovery efforts, pent-up demand, new construction starts and an uptick in oil and gas activity.

Going forward, 46% of distributors forecast a significant increase in sales for the full year of 2021 compared with 2020 while another 35% expect moderate growth due to the return of manufacturing, new business prospects and new project starts.

From the “glass is half full” side, 22% of distributors remained concerned about supply disruptions, higher cost of goods, customer caution, federal uncertainty, and a potential downturn.

“We are having a very nice rebound post-pandemic as the COVID crisis winds down, with over 60% of our distributors seeing sales increases compared with first-quarter 2020 sales,” said NetPlus Alliance Founder and Chairman Dan Judge. “That said, supply chain challenges and labor shortages remain major issues for distributors.”

Nearly 91% of distributors responding to the survey reported extended lead times and unpredictable supply, making on-time customer deliveries difficult. What’s more, over 51% of members reported higher inventory holdings due to supply shortages.

Distributor members also expressed concern over the current labor shortage, making it difficult to fill open positions required to meet customer demand.

The survey was completed in May and was based on first-quarter 2021 sales results.

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