September Sales Trends: A Mixed Bag Amid Economic Uncertainty

Year-over-year monthly sales dropped -5% and their Year-to-Date (YTD) and Trailing Twelve Months (TTM) were down -7% and -9%, respectively. PHCP firms and PHCP & PVF firms reported sales increases for September. PHCP firms reported sales increased 5% and PHCP & PVF firms reported an increase of more than 8%.

All respondents overall reported a median sales increase of nearly 5% for September 2024 vs. 2023. On a month-to-month basis (September vs. August 2024), sales decreased nearly 8%. Year-to-date (YTD) sales through September 30, 2024, vs. 2023 dropped -0.4%, while trailing twelve months (TTM) sales increased a modest 0.6%. Inventory increased 1.5% for September 2024 vs. September 2023. The median Three-Months Average Days Sales Outstanding dropped to 40 days for September.

Industrial PVF:
By primary business emphasis, the Industrial PVF firms reported that year over-year monthly sales declined by 5%. On the other hand, PHCP reported an increase of 5.10% and PHCP & PVF firms reported a large sales increase of 8.5%. All respondents overall reported a median sales increase of nearly 5% for September 2024 vs. 2023.

Economic Indicators:
The final "Real" GDP growth figure for the 2nd quarter 2024 remained at 3.0%--primarily due to higher consumer spending and inventory investment. Total wholesale sales for August increased 1% year over year, while inventories were essentially flat, rising a modest 0.6% vs. the prior year. The growth in "Real" wholesale sales came in at 2%--continuing the signs of inflation softening and confirming that we remain in a disinflationary period.

Housing starts and permits both decreased for September vs. August. Year-to-date single family starts and permits are both up vs. 2024. Multi-family remains significantly year-over-year. The Fed cut rates by 50 basis points at its September meeting so hopefully we'll see the construction markets experience some renewed stability and growth. The unemployment rate for September dropped to 4.1%--declining for the second consecutive month after four consecutive months of increases.

What ASA members are saying:

“A little soft for this time of the year. Multi-family we see some projects getting postponed and we even saw one get cancelled. This is new in our market.”

“Business has slowed as we have gotten closer to the presidential election but has been buoyed by sales for repairs post hurricane Helene.”

“Current work still characterized by highly competitive bidding and suppressed margins throughout the supply chain.”

“Geo-political unrest and upcoming election potentially increasing risk perceptions, which typically has a negative impact on investment.”

“In the South and Southeast, we see quote activity picking up, particularly for 2025 projects.”

“Large projects with Data Centers still happening. Municipalities and water associations making improvements.”

“Like it or not, there continues to be pessimism in the Economy. Much of it is the result of the inflation which has ceased but has not retracted and more importantly the high interest rates that remain. Those rates impact projects as owners and developers shy away from financing in these environments. We see many projects on hold. The election is another component to this slowing as it represents uncertainty.”

“Margins are down…getting very competitive.”

“Not optimistic about the next 6 months on the commercial side of things. Boston is slowing down substantially. Also, the states push to heat pumps has negatively affected out hydronic heating sales. Hopefully restrictions are eased, and GAs is allowed to continue to heat homes in Massachusetts.”

“Overall, there’s a general level of uncertainty about the next six months.”