The 2020 Mid-Year Economic Update_long

Commentary: Look Beyond the Headlines

Many sources are predicting a more significant slowdown in 2008 than previously thought, as several articles in this issue address. Perhaps the only predictable certainty for 2008 is that the attention deficit disorder the mainstream media suffers from will be epidemic. Not only is it an election year, but the credit crunch and residential construction downturn will give most reporters severe whiplash. It will be even harder to get an accurate read on the real shifts taking place in the economy.


We don't predict the future, but we do try to offer observations and insight from our coverage of diverse distribution sectors in

North America and abroad so our readers can plan and react quickly. Our lead ...

Many sources are predicting a more significant slowdown in 2008 than previously thought, as several articles in this issue address. Perhaps the only predictable certainty for 2008 is that the attention deficit disorder the mainstream media suffers from will be epidemic. Not only is it an election year, but the credit crunch and residential construction downturn will give most reporters severe whiplash. It will be even harder to get an accurate read on the real shifts taking place in the economy.

We don’t predict the future, but we do try to offer observations and insight from our coverage of diverse distribution sectors inNorth America and abroad so our readers can plan and react quickly. Our lead article distills feedback gained in the latest MDM survey as well as a poll of distribution consultants to measure emerging trends and concerns for the year ahead.

Five years ago, the severe industrial downturn in this country went unnoticed for a long time by national news outlets. This year, the industrial sector is making money, not headlines, even though growth has slowed to single-digit levels, according to sales trends in 2007. In fact, most distributors we talked with a year ago planned on single-digit growth.

As noted in the article State of Construction Mixed in this issue, the construction industry holds some bright spots beyond the severe downturn in residential markets. Public works and energy infrastructure construction are expected to offer long-term growth opportunities in the global economy. Heavy construction companies are booking powerplant construction projects at an unprecedented rate. Volatile oil markets are generating domestic production as well as spurring investment in alternate technologies.

Lessons from the last downturn: Many distributors found new customers or grew surviving customers in smaller niche market segments. In many cases, the dollar volume decreased but the profitability increased as customers relied more on their distributors for higher levels of knowledge and support in product, service and inventory management functions. But don’t expect to see that side of the story on the front page, except in MDM of course.

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