‘Paralysis’ Gives Way to ‘Malaise’ in First Quarter

First-quarter MDM-Baird Distribution Survey highlights a renewed sense of cautious optimism for later in 2013.
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The new year seems to have brought with it a renewed sense of cautious optimism for companies participating in the first-quarter 2013 MDM-Baird Distribution Survey. Month-to-month sales are proving to be inconsistent for many. As one respondent wrote: "Paralysis late last year has given way to malaise." But respondents are looking to the second half of the year with a more positive eye.

Revenues increased for most sectors represented by the survey, with average overall growth in the first quarter of 1.9 percent. Companies who operate in the PVF-water & sewer segment reported revenue gains of 11.6 percent, the strongest growth in this survey; pool & spa companies also reported double-digit sales increases at 10.1 percent.

Janitorial/sanitation and mechanical/power transmission were down 0.8 percent and 2.5 percent, respectively, and respondents classified as "other" report revenues were down 1 percent.

Respondents to the first-quarter survey expect growth to accelerate going forward, forecasting average growth overall of 4.4 percent in the second quarter and 4.9 percent for the entire year.

Weather was listed as a positive and a negative for many companies, causing project delays in the short term for several but setting the stage for improvement in the longer term. With that, distributors are keeping an eye on an apparently improving construction sector.

More than half of survey respondents (53 percent) said they planned to maintain current inventory levels through the second quarter. Nearly a third (30 percent) said they plan to increase levels. During the first quarter, 34 percent decreased inventory levels and 23 percent increased them.

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 (73 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 first-quarter 2013 survey, including results by sub-sector, in the April 25, 2013, issue of MDM Premium.

Results from the fourth-quarter 2013 survey are available here.

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