Even though results were generally positive, a sense of sluggishness and uncertainty continues to persist for respondents to the second-quarter 2013 MDM-Baird Distribution Survey. "Even though our growth looks pretty good relative to everyone else, it still feels soft," wrote one industrial distributor.
Revenues increased for most sectors represented by the survey, with average overall growth in the second quarter of 2.6 percent. Rental equipment companies reported revenue gains of 28.1 percent, the strongest in the survey, reflecting continued hesitation for permanent investments even as sales grow. Plumbing distributors also reported solid growth of 9.2 percent in the second quarter.
Four sectors reported revenues declines in the second quarter, led by industrial and energy PVF companies (down 7 percent). Other sectors declining include welding hardgoods (-4.2 percent), cutting tools (-1.5 percent) and mechanical/power transmission (-0.5 percent).
For the third quarter, respondents expect average revenue increases of 3.9 percent.
Half of the second-quarter survey respondents expect similar economic conditions in the second half of the year to what was seen in the first half, 39 percent expect conditions to improve, and 11 percent expect conditions to worsen. Respondents in building materials and welding hardgoods were the most optimistic about conditions, while those in cutting tools and safety were the most pessimistic.
More than half of survey respondents (55 percent) said they planned to maintain current inventory levels through the third quarter, while the remaining respondents were divided between increasing and decreasing levels. During the second quarter, 21 percent decreased inventory levels and 33 percent increased them. Read about current trends in inventory management in Distributors Get Aggressive with Inventory Management.
Thank you to all who participated in this quarter’s survey!
The quarterly survey with Robert W. Baird & Co. included more than 500 respondents in distribution (72 percent of respondents) and manufacturing in diverse sectors. The survey's goal is to gauge business trends and the outlook for the industry.
Read more about the results of the second-quarter 2013 survey, including results by sub-sector, in the July 25, 2013, issue of MDM Premium.
Results from the first-quarter 2013 survey are available here.
