Survey Says … Low Single Digit Industry Growth in 1st Half

A couple of weeks ago we asked how the first half of the year had gone for you. We had heard from a number of people about a slowdown, especially in the industrial segment, but had heard of contractor growth in selected markets.  It appeared that we were in a “patchwork” economic environment.  Different segments, different geographies have significantly different results but collectively they didn’t appear to be consistent with an industry / market / national viewpoint.

So, we decided to conduct an unscientific, opt-in, survey on ElectricalTrends.  We had 75 companies respond.  50 distributors, 25 manufacturers / reps. A good response considering it was only promoted in the posting.

Now, don’t shoot the messengers.  We’re only reporting what readers entered as their company’s performance. If you disagree with the data (some too optimistic, perhaps some too pessimistic), blame the person who did the data entry (and yes, there are some outliers that people may question), but, in getting 50 distributors we have enough to gain a broader perspective.

Survey Says

The weighted survey results are:

• for distributors            3.6%
• for manufacturers      4.6%
  • however 20% of respondents said that there growth is over 16% (must be lighting companies that are boasting!)
• Combining the two     4%

In looking at the dispersion of distributor results, we essentially have a bell curve (except for the outliers who are probably in California or heavily involved in LED lighting, made an acquisition or had a “one-off” project):

And this will differ from the quarterly reports we reviewed as there is no foreign currency exchange issues to be addressed

Why the Growth or Lack of Growth?

When asked for “Why”, distributors responded with these reasons (the Impact category is our observation)

And we looked at the correlation of whether companies are in urban, suburban, rural or “mixed” areas.  There was a direct correlation to companies in urban or mixed areas having higher growth rates than those in suburban or rural areas. For the most part, except maybe Houston (and we don’t know if anyone from Houston responded to the survey), most urban markets do not have extensive oil / gas operations.

This shift in business could portend an opportunity for manufacturers to consider reallocating resources … both salespeople as well as marketing efforts.

Definitive, no.  Informative as a benchmark, hopefully.

We thank you for your participation and hope the insight is helpful.  Thoughts? What is your outlook for the 2nd half of the year and what will drive performance in the 2nd half?