This is a part of the 2014 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.
2014 Distribution Trends Report
This article is a part of MDM’s 2014 Distribution Trends Report. The article analyzes the shifting sentiment towards the economy, as well as how investment will increase over the next year.
The U.S. economy appears to have finally turned a corner. Regardless of what the data has been telling us for the past two years, circumstances – both man-made and natural – have kept businesses in a cycle of uncertainty. But now there’s a sense that we know where we stand, and now that we know where we stand we can start moving forward.
“The U.S. economy is on firm footing now,” says David Manthey, senior research analyst, industrial distribution services at Robert W. Baird & Co. Inc. And that should mean continued growth across sectors, as well.
“Even though for almost everybody, 2014 got off to a terrible start … I think for most people now, business is good,” says Brent Grover of Evergreen Consulting Group. “Overall, people are looking for 2014 to be a good year in terms of sales compared to 2013.”
Distributors, for the most part, are positive about the results for the first half of 2014, though expectations may have been tempered by the events of the last few years. “I’d say we’re strong. I wouldn’t say that we’re setting any records right now,” says Jeff Haggard, vice president of sales for industrial distributor Haggard & Stocking, Indianapolis, IN. “After 2008 when things were a little rough, the following three years were incredibly strong for us, but we’ve had a slow-down. Different facets of our business are up, different facets are down.”
Broadly, many distributors are still waiting for residential construction to return to “normal” levels, but at the same time they’re focusing their businesses on where the opportunities are now. Much of that is centered on energy markets and automotive markets. For example, Graybar, Grainger and Praxair are just a few distributors that have expanded their presence in western North Dakota to service customers in the Bakken shale area. And growth in activity at automotive plants in central Tennessee has increased the number of housing and infrastructure projects there.
Because of the shift in attitude about conditions, more companies are poised to increase investment in their businesses. Many of these initiatives are outlined in the 2014 Distribution Trends Report, featured in this special double issue of Modern Distribution Management.
“I think it’s going to be a really interesting year in the distribution business,” says Andy Behr, director of marketing and business development for Hisco Inc., Houston, TX. “It’s analogous to plate tectonics; you have all this strain and stress build up for a period of time, and then the earthquake happens. You get a lot of change in a short amount of time and it seems like the change is instantaneous, but things have been relatively static for a long, long time and the pressures have been building up so you’re going to have pretty rapid change.”