ASA Distributors report August Sales Declines

Year-over-year monthly sales dropped -7% and their Year-to-Date and Trailing Twelve Months were down -9.8% and -9.3%, respectively. PHCP firms and PHCP & PVF firms reported sales declines for August, as well. PHCP firms reported sales down -2% and PHCP & PVF firms reported a sales decrease of -6%.

All respondents overall reported a median sales decrease of -3% for August 2024 vs. 2023. On a month-to-month basis (August vs. July 2024), sales increased 2%. Year-to-date sales through August 31, 2024, vs. 2023 dropped -0.6%, and trailing twelve months sales were very similar, declining -0.9%. Inventory increased 2.7% for August 2024 vs. August 2023. The median Three-Months Average Days Sales Outstanding edged up to 42 days for August.

Industrial PVF:

By primary business emphasis, the Industrial PVF firms reported that year over-year monthly sales declined by 7.1%. PHCP reported a decline of 1.8% and PHCP & PVF firms reported a sales decrease of 6.4%. All respondents overall reported a median sales decrease of 3% for August 2024 vs. 2023.

Economic Indicators:
The already stronger than expected "Real" GDP growth figure for the 2nd quarter 2024 was revised upward from 2.8% to 3.0%--primarily due to higher consumer spending and inventory investment. Total wholesale sales for July increased 3% year-over-year, while inventories were essentially flat--rising a modest 0.4% 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 increased for August vs. July. Year-to date single family starts and permits are both up vs. 2024. Multi-family remains down 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 July dropped to 4.2%--this follows four consecutive months of increases.

What ASA members are saying:

“As with most of 2024, August was another month with inconsistent activity and levels slightly off compared to budget or the prior year. Hiring continues to be a serious and very frustrating issue with little to no interest or qualified candidates for open positions.”

“August sales were down vs. August 2023. This is not a trend we are used to seeing in 2024. We blame this primarily on weather. Hurricane Debby was not a terrible event in our area. But she did bring multiple days of rain that created an off sales week for our company.”

“Business is flattish, up 1-2% organically. Price competition across certain items is fiercer than ever but we are optimistic about a stronger fall.”

“Business seems to be in a holding pattern. Customers are in a “wait and see” mode with the upcoming election. Service and repair business churns along, new construction is a little more volatile. Increasing competitors in our market are driving GM down. Fingers crossed for Q4.”

“Commercial is starting to soften, and we expect that trend to continue, with some support due to the large number of ongoing projects. However commercial in general is starting to show a downward trend.”

"I feel that the last few months of the year will be strong, although we have seen some slowing in the commercial sector of business."

“Multi-Family is starting to slow down, and we expect that to be a longer trend. With the amount of emphasis on this segment recently and its growth over the past several years we expect that slowdown to be noticeable over the next twelve months and potentially longer.”

“Overall sales are lower than last year, but overall, it seems to be a more normal year for us.”

“Sales continue to be steady but lower than the prior year. We are focused on lower inventory we built up earlier in the year before sales decline toward the end of the year.”

“Sales seem to be beginning to pick back up for the year; cashflow projections have been difficult; investments being made into our infrastructure to better prepare ourselves for when the market turns back around.”

“Sales were on par with what we expected, which was flat YOY. Currently the residential market is still soft, and we expect that to continue until we have more clarity on the (hopefully dropping) interest rate over the next several months.”

“We are continuing to see a deflationary environment with low demand due to constricting interest rates.”