“I think the slight decline for the month is actually very good performance because August 2017 is being compared to the extraordinary August 2016 when average distributor sales were up by 19.5 percent,” said HARDI Market Research & Benchmarking Analyst, Brian Loftus.  “The population-weighted cooling degree days were 40 percent above normal in August of 2016.  Even though August 2017 had 7 percent more cooling degree days than normal, it was 26 percent fewer than the prior year heat wave.”

“One would think that this off month was likely driven by Hurricane Harvey injecting some noise into the equation,” said HARDI Senior Economist, Connor Lokar, “but the results do not bear that out. Sales in the Southwest actually rose 0.5 percent, on average, for the month. While 0.5 percent growth would not normally be impressive, it outpaces the total average decline for the month.” 

Like all of us, ITR is still assessing the post Harvey and Irma terrain.  “Katrina and Sandy showed us that the severity of a localized storm is not enough to shift a major economic trend like GDP or U.S. Total Industrial Production. Accordingly, there is no need to change those forecasts for the near term.”

The Days Sales Outstanding (DSO), a measure of how quickly customers pay their bills, is now near 42 days. “July and August are the seasonal low points for the annual DSO cycle,” said Loftus. “This report matches the August 2015 and 2016 reports, so no sign of economic fatigue or stress.”

For more information, visit hardinet.org.

Publication date: 10/3/2017

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