ASA Distributors Report March Sales Decrease

Respondents reported that after a 5% growth in February, it's disappointing that all respondents overall reported median sales decline of -5% for March 2024 vs. 2023 (though, it's worth noting that March 2024 had a fewer sales/business days vs. March 2023). On a positive note, sales increased over 3% on a month-to-month basis (March vs. February 2024). Additionally, YTD sales through the 1st quarter 2024 vs. 2023 and trailing twelve months (TTM) sales both remained in positive territory with growth of 0.4% and 1.2%, respectively.

Industrial PVF:

The Industrial PVF firms had a very challenging March as the industrial PVF distributors reported year-over-year monthly sales with a decline of -2.2%. PHCP reported a large sales decline at -5.4% and PHCP & PVF firms also reported a sales decrease of -5.0%.

All while, Inventory contracted -1% for March 2024 vs. March 2023. The median Three-Months Average Days Sales Outstanding jumped to nearly 43 days, after falling to 40 days in February.

Economic Indicators:
The final "Real" GDP growth figure for the 4th quarter 2023 was revised back up to 3.4%. Total wholesale sales for February increased 0.8% year-over-year, while inventories decreased -1.5% vs. the prior year. The stronger 1.8% growth in "Real" wholesale sales continues to reinforce signs of inflation softening and that we remain in a disinflationary period.

With that being said, inflation has remained stubborn and has not been softening as much as many had hoped. It now appears the Fed will take a wait-and-see approach before cutting rates, as many had anticipated would happen sooner than later in 2024.

After recording a nice rebound in February, housing starts and permits both dropped considerably in March. There are numerous uncertainties that continue to produce headwinds for the already struggling housing market. In addition to the anticipated Fed rate reductions, many potential buyers and sellers now are waiting it out to see how the settlement against the realtor commission system will impact future sales.

What ASA members are saying:
“Business is steady, but competition is robust. The stubbornly high interest rates have tamped down business to some degree, but the privately funded projects are going strong.”

“March was a tough month with two less selling days than last year. Pipelines are still robust, but putting up growth is a challenge and managing costs is extremely difficult.”

“Modest growth, positive outlook for 2024.”

“We had a much better 1st quarter than we had projected, with sales actually improving by 13% over our 1st quarter 2023 results.”

“There has been some contraction on a few big projects… however, schools, warehouses, some other medical, and casinos have been moving forward. Just how much uncertainty is due to an election year chaos, global conflicts, or economic worries is difficult to determine.”