Yesterday’s numbers weren’t surprising to most distributors, but they reinforce that this year is about doing some hard work to position and strengthen the business. GDP rose at a 0.6% annual rate in the first quarter of 2008 to mirror the fourth quarter of 2007. The Federal Reserve lowered its key interest rate by one-quarter percentage point to 2.0 percent, the lowest since November 2004.
What the numbers aren’t saying: Certain markets are beginning to soften in the last 30-60 days for some industrial distributors, but sales levels still exceed expectations set last fall. Products bound for end-use markets in energy, export and infrastructure are staying strong.
Of the 142,000 attendees the CONEXPO/IFPE show last month drew to Las Vegas, about 19% were international visitors. There is no question that the weak dollar is keeping industrial and niche parts of construction and equipment markets strong. The concern now, which the Fed addressed yesterday, is whether consumers will stop spending. No one knows if the tax rebate will act as enough of a lubricant in the second and third quarters to continue to soften the inevitable impact on industrial markets.
Just as international markets have supported North American industrial sectors, you have to wonder (and hope) whether there may be a similar impact on consumer sectors during the summer vacation season. Many Americans are postponing Euro vacations and staying (and spending) closer to home. Anyone who has been to a major tourist attraction in the last year can attest to the stronger international crowds. (I was amazed this past weekend on a visit to New York City, an international city to be sure, how many international tourists were jamming Times Square and every other part of the city).
To be clear, I don’t expect the hospitality industry to keep us out of a recession. But I do believe we are experiencing a fundamental shift in how our economy has become much more interdependent on international consumption and demand. I don’t think the best economists have had enough time to fully quantify the secondary and tertiary impacts these shifts are having on North American industrial and distribution markets. Then again, I will always trust what I hear from those who are gaining and losing customers in these markets than what I read in the newspapers -any day.
Wading Through 2008
Yesterday's numbers weren't surprising to most distributors, but they reinforce that this year is about doing some hard work to position and strengthen the business. GDP rose at a 0.6% annual rate in the first quarter of 2008 to mirror the fourth quarter of 2007. The Federal Reserve lowered its key interest rate by one-quarter percentage point to 2.0 percent, the lowest since November 2004.
What the numbers aren't saying: Certain markets are beginning to soften in the last 30-60 days for some industrial distributors, but sales levels still exceed expectations set last fall. Products bound for end-use markets in energy, export and infrastructure are staying strong.
Of the 142,000 attendees the CONEXPO/IFPE show last month drew to Las Vegas, about 19% were ...
What the numbers aren't saying: Certain markets are beginning to soften in the last 30-60 days for some industrial distributors, but sales levels still exceed expectations set last fall. Products bound for end-use markets in energy, export and infrastructure are staying strong.
Of the 142,000 attendees the CONEXPO/IFPE show last month drew to Las Vegas, about 19% were ...
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- Filed In: Subscriber Only, Research & Analytics, Free, Economic Trends
About the Author
Tom Gale
Tom Gale has been an MDM researcher and industry analyst for 30+ years on independent distribution channel trends, consolidation, technology and competitive landscape. He is a frequent speaker and moderator on these topics at company, marketing group and association meetings in North America and Europe.
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