Greater Stability on the Horizon for Wholesale Distributors - Modern Distribution Management

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Greater Stability on the Horizon for Wholesale Distributors

While volatility persists, the gap between actual and inflation-adjusted revenues is decreasing.

While many companies are still seeing month-to-month volatility, wholesale distributors may soon be enjoying greater stability, according to Brian Lewandowski, research associate for the business research division of the Leeds School of Business at the University of Colorado Boulder. Lewandowski gave an update on the wholesale distribution industry and macroeconomic conditions during the MDM webcast 2013 Mid-Year Economic Update: Positive Prospects for the Industry.

One sign of approaching stabilization is that the difference between wholesale distribution sector actual revenues and real (inflation-adjusted) revenues in 2012 has narrowed versus prior years, Lewandowski says. “In 2011, and the year prior to that, we saw the difference between actual and real revenues be double-digits in many cases,” he says.

In oil and gas, for example, the gap has been as high as 30 percent in recent years. But in 2012, the actual-real revenue gap was only 0.8 percent. Much smaller, single-digit gaps in most sectors for 2012 are telling, he says: “It shows that there’s a lot more stability in the market, especially in prices.”

Tom Gale, president of Industrial Market Information and publisher of Modern Distribution Management, says many distributors are still experiencing significant month-to-month revenue swings. “There still seems to be a lot of volatility, but I think what the data is showing is, overall, we are slowing starting to move into a little more stability,” he says.

For more details on economic trends in distribution, including information on specific sectors as well as a macroeconomic update, access the 2013 Mid-Year Economic Update on-demand or purchase a webcast DVD.

You can also find information on segment and overall industry revenue trends, inventory levels and other critical benchmark data for distribution in MDM’s recently-released 2013 Wholesale Distribution Economic Trends Report.

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