Sales are growing among electrical distributors

July 6, 2004
July 6, 2004 - Quarterly survey shows that majority of respondents estimated increase during first quarter of this year.

Sales are growing among electrical distributors, according to the National Association of Electrical Distributors' most recent Quarterly Sales Change Expectation survey results.

Of the survey's 346 respondents, 81.2% estimated increased sales during first quarter (January - March) of this year. It appears that the trend will continue since 84.7% of respondents anticipate increased sales in the second quarter (April - June).

For the first quarter (Q1), distributors' hopes in double-digit sales increases found reality. Compared with the last Quarterly Sales Change Expectation (QSCE) survey, more than double the number of respondents (42.8%) estimated that their sales for the most recent past quarter would grow 10% or more. The three other categories with the largest response were sales growth by 6 to 7.9% (6.6%), 8 to 9.9% and 5 to 5.9% (both 6.4%).

However, some distributors are still facing hard times, 3.8% of respondents reported flat sales and 4.0% expected negative sales growth of -10% or more.

The survey was distributed in early April to approximately 3,700 distributor locations. The questionnaire focused on sales expectations for the previous and upcoming quarter and the results feature statistical breakouts by geographic region and number of employees.

The outlook for the second quarter is bright, although a little more cautious in the volume of sales expected. The largest portion of distributor respondents, 33.5%, expect continued growth of 10% or greater for the upcoming quarter. Other top categories were 5 to 5.9% (13.0%), 2 to 2.9% (8.7%), 6 to 7.9% (8.1%) and 0% (7.5%). The survey also reveals that the anticipation of negative sales overall has dropped to 4.3% (compared with 12.8% in the last survey).

Surprisingly, the Western region, which was the least optimistic coming into the first quarter of 2004, had the largest percentage of distributors experiencing increased sales with 85.9%. The Southern region was second (84%), followed by the Midwestern (78.9%) and Northeastern (73.3%). For Q2, all four regions remain optimistic about increased sales, with only a 5% differential between the most optimistic, the West at 87.2% and the least optimistic, the Northeast at 82.2%.

Mid-size businesses with 30 to 49 employees appear the most confident with 94.3% estimating increased sales for the first quarter of 2004 followed by
businesses with 50 or more employees (84.7%), 20 to 29 employees (81.7%), 10 to 19 employees (81.1%), one to four employees (78.3) and five to nine employees (73%).

Mid-size companies with 30 to 49 employees continue that positive outlook into the second quarter with 100% of those responding predicting increased sales. The smallest companies, those with one to four employees, had the worst outlook, with only 60.9% expecting increased sales in Q2. In the middle were businesses with 50 or more employees (89.8%), 20 to 29 employees (88.3%), 10 to 19 (87.4%), and five to nine employees (74.3%).

NAED is based in St. Louis, MO. For more information visit www.naed.org.

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