Growth continued in the third quarter for most respondents to the third-quarter 2013 MDM-Baird Distribution Survey, but not at the rate or magnitude that most respondents would have liked to see. "We seem to be muddling along," said one industrial distributor. "Growing, but not at a stellar pace."
Revenues increased for most sectors represented by the survey, with average overall growth in the third quarter of 2.1 percent. Plumbing companies reported revenue gains of 10.1 percent, the strongest in the survey, boosted by improving residential trends. PVF companies in water & sewer also reported solid revenue growth with an average increase of 6.2 percent.
Two sectors reported revenue declines in the third quarter, led by mechanical and power transmission companies (down 3 percent). The cutting tools sector also saw revenue decline, on average 1.7 percent.
Eight sectors reported sales growth lower than the overall average.
For the fourth quarter, respondents expect an average revenue increase of 2.4 percent. Of all segments, plumbing again had the highest expectations for the fourth quarter. Respondents in the segment forecast average growth of 9.7 percent for the quarter, boosted by strong residential construction trends.
Nearly a third of respondents (32 percent) overall expect to decrease inventory levels in the fourth quarter, with only 15 percent expecting to increase levels. The remaining respondents (53 percent) expect to maintain current levels. During the third quarter, 24 percent increased inventory levels, while 25 percent decreased inventory.
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 (70 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 third-quarter 2013 survey, including results by sub-sector, in the upcoming Oct. 25, 2013, issue of MDM Premium.
Results from the second-quarter 2013 survey are available here.