2Q MDM-Baird Distribution Survey: Optimism Wanes, But Pessimism Held at Bay

Overall average revenue growth outpaces forecasts from the first quarter, but is lower than year-over-year growth.
jenel-white

The brief burst of optimism that we saw earlier this year has been tempered, according to the latest results from the second-quarter 2012 MDM-Baird distribution benchmarking survey. Respondents indicate markets are "stabilizing," a trend they expect to continue throughout the year in most sectors.

\"TheDownload a Free Chapter:
The Little Black Book of Strategic Planning for Distributors

Submit your email address below to receive a chapter of Brent Grover’s new book. When you submit your email you will be signed up to receive weekly distribution news updates.

\"\"

Overall average revenue growth actually outpaced forecasts from last quarter's survey, 7.5 percent versus the forecast 7 percent, but was lower than the year-over-year growth reported in the first-quarter survey (8.4 percent). There's a sense that we may have settled into more of a pattern of steady growth. Reasons given include regular seasonal slowdowns and no backlog due to a lack of slowdown during the mild winter months. There's still a fair amount of uncertainty to contend with, from the global economic conditions to consolidation to non-traditional competition such as Amazon.

Get sales and inventory trends for industrial distribution in the 2012 Wholesale Distribution Economic Reports.

But overall respondents don't see this moderation as a prelude to a recession – pessimism hasn't taken over. As one respondent in industrial supply put it: "Slower business probably in reaction to unstable worldwide financial markets – the industrial sector has no other reason to slowdown."

Here is an overview of the second-quarter 2012 results:

  • On average sales grew 7.5 percent in the second quarter 2012 for respondents.
  • On average survey respondents expect revenue growth of 5.5 percent in the third quarter of 2012 and 5.2 percent for the full year.
  • Cutting tools and industrial & energy PVF saw the greatest growth; jan-san and plumbing had the smallest revenue growth.
  • Nearly half of respondents increased inventory levels in the first quarter; 25 percent expect to increase inventory in the second quarter.

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 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 2012 survey, including results by sub-sector, in the next issue of MDM Premium, out on Wednesday, July 25.

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.