Find a wealth of data and analysis extracted from the 1Q24 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.
For many industrial and building materials distributors, the start to 2024 was the fourth consecutive quarter of treading water in choppy markets. Add to that a difficult year-to-year comparison to a relatively strong 2023 first quarter – the only positive growth quarter in 2023 – and most distributors felt like someone snatched the football away as they were looking to put some points on the board to kickstart 2024.
Baird-MDM survey respondents dealt with tough currents in play during the first quarter, but overall hold a more optimistic view for the second quarter and rest of the year. “We lost a week in February to weather and March had three fewer business days than last year,” said one MRO/safety distributor. “Incoming orders are better than revenues.”
If there is a silver lining to March, with the steepest drop in revenues during the quarter, fewer selling days impacted many distributors. The overall flatness of the quarter indicates a continued market stabilization after consistently declining revenues through the end of 2022 and the first half of 2023. There’s also more consistent afternotes of tailwind comments centering around renewables markets and infrastructure spend.
Comments from all sectors showed mixed results across the spectrum. And overall, survey respondents are slightly more optimistic for the next quarter than they were at the beginning of the year for how the first quarter was going to play out. The caveat is that headwinds remain in place as reported by respondents: continued inflation in costs, deflationary pricing in fasteners and other sectors, and sluggish demand.
But the first-quarter revenue growth acceleration that survey respondents expressed in last quarter’s survey did not show up; revenues were 190 basis points below forecasted growth of +1.4%, as the Baird-MDM survey first quarter revenues softened -0.5% year over year compared to the first quarter of 2023, while pricing strengthened by 0.7% in the quarter. Margin compression was noted across most survey subsectors as customers are increasingly resistant to price increases, and cost pressures continue to grow.
MDM Premium subscribers can download and view the MDM 1Q 2024 MarketPulse Report from here.
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Tom Gale
Tom Gale has been an MDM researcher and industry analyst for 30+ years on independent distribution channel trends, consolidation, technology and competitive landscape. He is a frequent speaker and moderator on these topics at company, marketing group and association meetings in North America and Europe.
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