Recovery is Different This Time Around

Distributors at NAW meeting still hopeful but cautious.

While economist Brian Wesbury, chief economist for First Trust Advisors LP, warns business executives about economic hypochondria and missing the V-shaped recovery taking place, not all wholesale distribution executives are ready to jump for joy. Wesbury presented a 2011-2012 economic forecast yesterday at the National Association of Wholesaler-Distributors annual executive summit in Washington D.C.

We Deliver Distribution News to Your Inbox
Sign up below to receive MDM Update, your free weekly distribution news update by email.


Case in point: Julia Klein, president and CEO of C.H. Briggs, a specialty hardware distributor serving mid-Atlantic states. In a panel discussion, Klein wondered aloud whether she missed something the past three years, referencing the dramatic downturn in residential construction markets. Her comments resonated with many in the audience. While most attendees at the NAW meeting liked the economist’s message of optimism, there was more than a little skepticism. Wesbury’s thesis was that talk of a “New Normal” is overstated – consumer behavior has bounced back based on six straight quarters of GDP growth.  This rebound is no different than past rebounds – the economy goes, then it goes down, then it goes back up. Economics 101, from Wesbury’s viewpoint.

Industrial and other markets finished 2010 very strong. Grainger’s sales increased 15% in 2010. On a broad-brush basis, many privately-held distributors seemed to report increases of 5-10 percent for the first half of 2010, and in the 15-20+ percent increase range this last half. The strength of the last quarter surprised many.

The consensus feedback I came away with from the NAW Summit is this time is in fact different. While we have a short memory as a nation and like to spend, not save, the number of jobs lost in this last recession impacted this country’s perspective more than since the 1930s. While certain aspects of consumption have rebounded, the easy-money mortgage bubble that fueled residential construction is done. There is no replacement in sight. Customers in all sectors are operating more leanly.

Some distributors are dealing with the changes that have taken place by segmenting their customers more carefully to understand and discover growth opportunity. With the new Facing the Forces of Change report the focus of this meeting, there were some great examples of ways wholesale distribution companies are resetting expectations and strategies for growth in 2011.

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
  • 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


articles left

Want more Premium content from MDM?

Subscribe today and get:

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



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
  • 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.