ASA Distributor Members Report: Not A Bad Start To 2024 With Sales
Respondents reported median sales growth of nearly 2% for January 2024 vs. 2023. The results were mixed though with half of the respondents reporting sales change between -8% to +8% for January 2024 vs. 2023. On a month-to-month basis (January 2024 vs. December 2023), it was encouraging to see respondents report that sales increased over 8%--this breaks a streak of two consecutive months of declines. Inventory contracted (-2%) for January 2024 vs. January 2023.
Industrial PVF:
The news was also highly positive for industrial PVF distributors reported relatively flat year-over-year monthly sales with a small decline of -0.4%. PHCP reported sales growth for January of 5% and PHCP & PVF firms reported a sales decline of -4%.
On the other hand, Inventory contracted (-2%) for January 2024 vs. January 2023. The median Three Months Average Days Sales Outstanding increased sharply to nearly 42 days in January compared to 40 days in December.
Economic Indicators:
The advance "Real" GDP growth figure for the 4th quarter 2023 was released at 3.3%. Total wholesale sales for December increased 1.6% year-over- year, while inventories decreased -2.7% vs. the prior year. The stronger 3.9% growth in "Real" wholesale sales continues to reinforce signs of inflation softening and that we remain in a disinflationary period.
Housing starts and permits both came in at very low levels for January. Permits came in at their lowest level since April 2020. It is worth noting that there are challenges with the Census' data collection early in the year and these figures may be revised upward; nonetheless, this is a discouraging start to the year. The unemployment rate for January remained at 3.7% for the third consecutive month.
What ASA members are saying:
“Activity was stable throughout the month, but down compared to last year given delays in larger projects. Pricing pressure continues on larger project orders given interest rate levels and the continuing impact of high inflation on owners and developers.”
“Business activity is hanging in there - we think the expected drop in rates will further propel the housing market.”
“Slow start to 2024 with modest Year over Year growth. Consistent with previous years.”
“Slower start to the year but also not unusual. We anticipate Sales and Margins to both increase in the upcoming months.”
“This January was lower compared to last year. We had 1 week of bad winter weather with some of our locations not operating or they saw very little activity as everyone was staying home.”