‘Election Paralysis’ Dampens Latest MDM-Baird Distribution Survey Results

Nearly half of respondents to the latest survey have deferred business investment due to the election.

The latest results from the third-quarter 2012 MDM-Baird Distribution Survey are out, and while we’re still seeing growth, the upcoming election has put many distributors’ plans for investment on hold.

\"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.


Forty-four percent of respondents to the quarterly survey said they had deferred business decisions pending the results of the election, including hiring and investment spending, as well as employee compensation.

Respondents explained:

  • “Many customers are waiting to see what happens in November.”
  • “The government needs to provide clear direction for the country to get uncertainty out of the marketplace.”
  • “The economy is in a holding pattern …”
  • “A lot of jobs are pending due to election paralysis.”
  • “It’s probably at least six months before people can get confident – have to deal with the election, fiscal cliff, etc.”

Associate Editor Jenel Stelton-Holtmeier wrote about distributors' top election concerns noted in the survey and talked with distributor associations that are playing an active role in Washington D.C. Read that article here: Top Election Concerns for Distributors – Taxes, Health Insurance & Regulatory Actions

The survey still found growth across most segments, but that growth has moderated with overall third-quarter sales up 4.1 percent for respondents. Revenues are expected to grow 2.4 percent in the fourth-quarter 2012 and 3.6 percent of 2013. That represents lower expectations than we’ve seen in past quarters’ surveys.

Rental equipment, gases & cylinder rental and building materials saw the greatest growth in the third quarter 2012, although building materials growth (5.5 percent) was roughly flat when accounting for price changes (up 5.1 percent).

PVF-industrial & energy, pool & spa and mechanical/power transmission reported the lowest growth rates. Pricing also had an impact on the PVF-industrial & energy segment, as prices fell by 6 percent, according to respondents.

Across segments, gross margins were up by 80 basis points in the third quarter 2012, and pricing up by 1.5 percent.

About a third of respondents increased inventory levels in the third quarter 2012, while a quarter of respondents decreased inventory. The increase in inventory is consistent with seasonal trends, according to the survey, but does indicate some caution. In the fourth quarter 2012, 16 percent expect to increase inventories, with 38 percent planning to decrease.

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 (75 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 2012 survey, including results by sub-sector, in the next issue of MDM Premium, out on Thursday, Oct. 25, 2012.

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


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



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.