“The month to month performance can be volatile. The strong growth report for December reflects a couple factors,” noted Brian Loftus, HARDI's market research and benchmarking analyst. “This year had one extra billing day than the prior year; we had an extremely cold period that stretched across much of the country this season, and the Dec. 2012 sales were quite weak across the majority of the country.”
According to Loftus, the annualized growth rate is a better measure of overall industry trend. That growth rate was reported in the 5 to 6 percent range for most of 2013.
“The annual sales growth or 12/12 rate-of-change improved to 7.3 percent after the strong December,” said Andrew Duguay, HARDI senior economist. “A full 80 percent of members reported higher sales in 2013 versus the year prior.”
HARDI reported that inventory levels were understandably modest after the busy December and that the days sales outstanding (DSO), a measure of how quickly customers pay their bills, indicated a healthy financial profile for contractors.
“The DSO is at a lower point for this time of year than in 2011 or 2012,” said Loftus.
“The cold weather helped in December, but construction activity and consumer spending was improving during the year also,” said Duguay.
Jan. 2014 will have the same number of billing days as Jan. 2013. Duguay and Loftus noted that it will be interesting to see if it was cold enough to generate sales comparable to the high-teens growth rate experienced during Jan. 2013.
For more information, visit www.hardinet.org.