First Half Sales Survey Says …

Confused and widely divergent by market segment, geographically and by distributor size.

Not the answer you were expecting, but sorry, averages can be deceiving.  First the averages as reported by electrical distributors and electrical manufacturers on our first half sales survey:

Commercial                                                        -12.95%
Industrial                                                               2.15%
Institutional (Medical, Gov, Ed and similar)               5.67%
Residential                                                           -6.40%

Now we’re not saying you should take this as gospel.  Why?  Consider that for commercial (which includes commercial contractor and commercial MRO), response ranges were from +5.2 to -30; institutional went from 2 to 10 and residential went from -5 to -10.  Couple this with discussions we’ve had with distributors that range from +23 (industrial) and +11 (commercial contractor) to +25 (commercial – lighting focus) and others that are -8 to -10 (commercial contractor).

We’ve noticed some patterns, however, that may be helpful:

• Many who are up have targeted niches, are in the industrial segment or have a heavy focus on energy initiatives.  A few have actively sought new customers (must be heretics!)
• Aside from energy efficiency / lighting distributors, many of which are small, it appears that smaller distributors (<$20M), many of whom were more resi or light commercial, are suffering the most.  Larger distributors made changes in 2009 and have economies of scale and are taking share.
• Talking to distributors around the country indicates that Rexel could be losing share (or at least distributors feel they are taking share from them).
• Geographics can make a difference … consider the economic environment in different parts of the country.
• Some distributors and manufacturers are reporting 20+% growth in lamp and ballast sales

So what do we have to look forward to for the remainder of the year?  While we don’t have a crystal ball, here’s what our survey respondents said:

Commercial                                                  -12.5%
Industrial                                                         3.0%
Institutional (Medical, Gov, Ed and similar)         7.33%
Residential                                                     -6.50%

And if you are residentially focused, sorry.  Being down another 6% over last year is tough and then to hear that existing home sales for July were down 27% brings further crimp to the business.  Essentially there is limited new construction going on, hence the only market is the elusive remodeling market.

How do these sales results compare to yours and your fall outlook?