Electrical distributors expect positive sales for fourth quarter

Dec. 16, 2003
Dec. 16, 2003 - Association survey says large portion of distributors predict a 10% increase in sales.

Most electrical distributors expect positive or no change in sales for the upcoming fourth quarter.

This is according to the National Association of Electrical Distributors. The association has announced these results from its Quarterly Sales Change Expectation Report for the third and fourth quarter of this year. The survey was sent in early October to approximately 3,500 distributor locations, investigating the previous and upcoming quarter's sales change expectations.

For the upcoming fourth quarter, a majority of the 362 distributor respondents (83.1%) expected positive or no change in sales.

The largest portion of respondents, 15.7%, predicted a 10% or greater increase in sales for Q4. The three other categories with the largest response were the categories of 5 to 5.9% (11.9%), 2 to 2.9% (11.0%), and 0% (11.0%). More than one-third (42.2%) of the total respondents expect an increase in sales of 5% or more for the 2003 fourth quarter.

However, some distributors were still cautious in their estimates: 3% expected a decrease of 10% or more. Overall, fewer participants anticipated negative sales change with expectations dropping from 24% (in Q2 -Q3 report) to 11.9% of all respondents.

Geographically, the Midwestern U.S. was most optimistic with 76.4% of the respondents expecting positive sales in the forthcoming quarter, followed by the South (74.9%), the Northeast (68.9%), and finally the West (64.3%).

Distributors also showed confidence in their expectations for the recently finished third quarter. More than 80% of respondents expected positive or no change in sales, with the largest group (25.1%) expecting 10% or more improvement. Reality is proving to be better than the prediction in this case, because only 15.7% of distributors predicted that their Q3 sales would be 10% or more in the last QSCE report in July.

Prudence still characterized many distributors' responses, with nearly a 10th (9.4%) of respondents expecting flat sales in Q3. Of the nearly 20% of respondents who anticipate negative sales change, a fairly large number of distributors (6.6%) expected the worst with a negative sales change of 10% or more. Overall, the results are spread across the spectrum, representing a wide variety of experiences.

From a regional perspective, expectations for the "most recent past quarter" soared in the Midwestern section of the U.S. with 78.6% of respondents in that region expecting positive sales. Nearly one-third of the Midwest forecasted sales change increases of 10% or more. The positive sales change in the other regions followed with: South (70.9%), West (65.6%) and Northeast (60.5%).

NAED, based in St. Louis, MO, is the trade association for the electrical distribution industry. For more information visit www.naed.org.

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