This blog is reprinted with permission from Pembroke Consulting's Adam Fein's Distribution Trends blog. MDM has partnered with Fein to offer his exclusive 2010 Wholesale Distribution Economic Reports, now available for 18 distribution sectors at www.mdm.com/wder. Here is his take on current economic conditions, based on the data presented in the just-released reports.

At long last, the economic recovery in distribution is underway.

As I predicted last July, the wholesale distribution industry will show year-over-year growth in the first quarter of 2010. I hope you took my advice from August and began planning for growth.

Unfortunately, we’re growing from a much-smaller base because 2009 was one of the worst years on record for wholesale distributors.

Total revenues of wholesale distributors shrunk by -14.8% to $3.8 trillion in 2009, marking the first year of negative growth since the comparatively mild decline of -1.0% in 2001. Revenues decreased by -9.1% after adjusting for the effects of price change (inflation and deflation). All but one of the 19 major industry sectors registered negative revenue growth in 2009.

The chart below shows year-over-year quarterly changes in core wholesaler-distributor revenues along with my forecast for the rest of 2010.

You can see the turnaround in the growth rates. Note that core revenues exclude the two large sectors tied to commodity prices – Oil and Gas Products Wholesale Distributors and Agricultural Products Wholesale Distributors – because they distort the computations during periods of inflation or deflation.

The historical data differ slightly from my previous reports because there was a massive restatement of government data in late March 2010. My brand-new 2010 Wholesale Distribution Economic Reports include the latest data.

Employment in wholesale distribution dropped by more than 250,000 jobs in 2009, marking the second consecutive annual decline. The wholesale distribution industry now employs about 4.8 million people – nearly 1 out of 20 private sector U.S. workers. Job losses were widespread across most sectors, although three sectors – building materials, metals, and computer equipment  – registered double-digit declines in 2009.

Want to know more about what’s ahead? Join me for a free webcast on April 29 sponsored by Infor and IBM and produced by MDM called Growth Planning for 2010. As a special bonus, you'll get a 10% discount off the price of any one of the 18 brand-new 2010 Wholesale Distribution Economic Reports when you sign up.