Distributors Announce Growth
Four of the seven regions that comprise HARDI’s Monthly Targeted and Regional Economic News for Distribution Strategies (TRENDS) Report contracted during August, after healthy growth from each sector in July.
Evaluating the sales performance over a 12-month period can be more insightful than the recent see-saw pattern in various regions that reflects the unusual weather patterns.
“Sales over the past 12 months are up 3.8 percent,” said Andrew Duguay, HARDI economist. “The improving results on a 12-month basis since the recent low point of 2.7 percent in February show a modest, stable growth trend this year that is consistent with the macroeconomic trends we are witnessing in U.S. industrial production and retail sales so far in 2012.”
The modest economic improvement is also evident in the Days Sales Outstanding (a measure of how quickly customers pay their bills) experienced by HARDI members. The DSO settled in at more than 50 days in the spring, but has consistently improved to less than 45 days according to the August survey. The steady overall performance of sales per employee masks the impressive improvement in the Northeast and Great Lakes regions, versus flat results or modest declines of sales per employee from other regions.
“The performance is encouraging and consistent with recent consumer confidence and housing data,” said Brian Loftus, market research and benchmarking analyst.
“The stability that has been supporting consumer confidence could be threatened in the months ahead,” said Duguay. “It seems the positive momentum could be offset by the economic and political uncertainty emanating from Europe and China, and the prospects for surviving our own fiscal cliff that is due to arrive in January.”
Publication date: 11/19/2012