ASA Members Report July Sales Decline
Respondents to ASA’s monthly sales survey reported a median sales decline of 10 percent when comparing July 2023 sales totals to June 2023 numbers. On a month-to-month basis, three of the last four months now have been either flat or negative. April experienced a median 9 percent drop, followed by an outlier in May (13 percent increase) and then a flat (0.1 percent) June. Median year-over-year sales growth returned to positive territory at 3% growth for July 2023 vs. 2022, yet 40 percent of respondents to the survey reported a decline in year-over-year sales.
Industrial PVF:
PVF distributor respondents to the survey reported a 6.8 percent sales increase comparing July 2023 to July 2022. Calendar year-to-date, PVF distributors reported a 4.6% increase in sales, and a 10.4% increase when comparing trailing-12-month totals.
Economic Indicators:
The advance "Real" GDP growth for the 2nd quarter 2023 was released at 2.4%. Total wholesale sales for June contracted -7% year-over-year, while inventories grew 1% vs. the prior year. The positive 0.7% growth in "Real" wholesale sales continued to reinforce a sign that inflation is beginning to calm and that we are entering a disinflationary period. Housing permits and starts for July were up vs. June.
The unemployment rate decreased for the second consecutive month dropping to 3.5% in July. After initial claims for unemployment exceeded 250,000 for June – it’s highest level since October 2021-- it dropped back to 228,000 for July. Manufacturers' new orders of nondefense capital goods reached its
highest level since July 2014.
What ASA members are saying:
“Business seems to have been relatively steady for the past few months and the customers believe it will remain that way through the end of the year. Like most of our peers, we continue to watch headcount and expenses while we wait out what the future looks like. The media constantly talking about a recession has scared us into not overextending regarding hiring. Margins are down slightly from last year which we equate to aggressive competition and commodity deflation we are all fighting through.”
“More market consolidation & reduced margins seem to be the norm today.”
“Overall, business remains steady and continues to exceed the prior year. However, hiring is an ongoing struggle, combined with a shortage of plumbers, there is growing concern about the future run rate.”