2011 … Anything But Rosy

2011 is around the corner and the numbers are starting to fly.  Based upon what we’ve seen, from early survey results from our 2011 Distributor Channel Challenges survey to the RW Baird Industrial Distribution 3Q Survey (done in conjunction with MDM), look for 2011 to be a carbon copy of 2010.

• A number of distributors stated that they will be destocking, with 50% keeping their inventory steady.  This says “so much for manufacturer end of year stocking initiatives” and that distributors are better managing their inventory, seeking to improve their turns as well as taking advantage of improved manufacturer delivery processes.
• Industrial 2011 projections were 5.7-8.4%, depending upon sector (i.e. safety, cutting, fasteners and MRO).
• The industrial segment sees some strength in the manufacturing sector.
• Industrial national chains, and larger idependents are taking share (similar is happening in electrical … the business is moving to larger distributors with more resources … the days of the small (<$25M) distributor are declining.)
• The building industry’s 2011 projections (plumbing, building materials, HVAC, roofing) are -2.8% to 4.3%.  In other words … anemic.  The business is expected to be more repair / renovation focused rather than replacement or new-oriented.
• Industrial Wire & Cable is forecast at 6.3% for 2011 with the industrial segment doing okay but the commercial construction market continuing to be weak with continued intense price competition.

The picture is anything but rosy.  For 2011, plan no market help and that your growth will come from the strategies that you develop to either increase product application, targeting of new markets or taking share.