Signs Pointing to Growth? Or a Double-Dip Recession? - Modern Distribution Management

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Signs Pointing to Growth? Or a Double-Dip Recession?

Inconsistent recovery making many feel like forecasts have been the equivalent of reaching for a Magic Eight Ball.

The latest round of economic news may have people thinking economists are checking the equivalent of a Magic Eight Ball for answers. From signs pointing to growth (The Conference Board) to "unusual uncertainty" (Fed Chairman Ben Bernanke) to growing fears for a double-dip recession, forecasts run the gauntlet.

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Part of the problem may lie in the fact that recovery is occurring at such an inconsistent rate. For example, low positive numbers in the residential housing market over the past few months need to be taken with a grain of salt because, to quote David Gordon, president of Channel Marketing Group, "They had to get better because they sure couldn't get any worse." (The June housing starts report had the market falling again.)

At the same time, industrial sectors – arguably among the hardest hit – seem to be boasting a more robust recovery, at least for some companies.

In its second-quarter earnings call, WESCO (No. 5 on the top 25 electrical distributors) indicated it experienced 25 percent year-over-year growth in the industrial end market. The construction end market grew only 4 percent in the same period for the distributor.

One respondent to the second-quarter Distribution Survey from MDM and Baird may have summed the situation up best: "The economy is relatively difficult to gauge – 'fragile' is the key word.'"

Get the latest economic indicators with the MDM Economy News RSS feed or at the MDM Databank.

Get sector-specific economic data from Adam Fein's Wholesale Distribution Economic Reports

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