January 25, 2008

This is an overview of wholesale price inflation trends in the past year for commodities in industrial and construction channels. Overall, inflation was 6.3 percent in 2007, a significantly larger jump than in 2006.

Inflation by Commodity Group: 44 product groups – 4Q and Full Year 2007

Wholesale prices jumped 6.3 percent in 2007, due to a surge in fuel and food prices. Without fuel and food, core inflation saw a more moderate 2-percent increase, the Bureau of Labor Statistics reported.

The government attributed the faster overall rate of increase to the index of finished energy goods, which rose 18.4 percent in 2007 after a much shorter climb of 2 percent a year earlier. Finished …

These select product groups provide a snapshot of inflation trends. Fourth quarter 2006 is compared with fourth quarter 2007, and the third quarter 2007 with the fourth quarter 2007. Trend from 2006 to 2007 also presented. Graphs depict trends from January 2006. Download complete file below.
 
Abrasives
Adhesives &Sealants
Cutting Tools &Accessories
Hand &Edge Tools
 
Fasteners
Power-Driven Hand Tools
Ball &Roller Bearings
Mechanical Power Transmission Equipment

Electrical Machinery/Equipment
Industrial Material Handling Equipment
Industrial Gases
Welding Machinery/Equipment

Valves, Except Fluid Power
Pumps, Compressors &Equipment
Fluid Power Equipment
Plumbing Fixtures …

Wholesaler-distributors in varied sectors have been seeing strong double-digit top-line revenue growth. While the economic expansion increased unit sales, recognize that unusually high commodity prices have made revenue growth easier to achieve in recent years. In Adam Fein’s recent MDM Webcast, Wholesale Distribution Economic Outlook,”he addressed this issue.

Fein, president of Pembroke Consulting, presented as example the hardware, plumbing, heating and cooling distribution sector, which has seen flat growth year-over-year. But once adjusted for inflation, unit growth was negative.

“I call that the growth gap,”he says. In this case, the gap was 5.3 percent. “I can’t predict commodity prices any better than anyone else can. But what it does say is there has been …

Sales. November 2007 sales of merchant wholesalers, except manufacturers’sales branches and offices, were $380.4 billion, up 2.2 percent from the revised October level and were up 14 percent from November 2006. Sales of durable goods were up 0.9 percent from last month and up 6.1 percent from a year ago. Compared to last month, sales of computer and computer peripheral equipment and software were up 3.9 percent and sales of electrical and electronic goods, up 3.1 percent. Sales of nondurable goods were up 3.3 percent from last month and up 21.7 percent from last year. Sales of farm product raw materials were up 9.7 percent from last month and sales of petroleum and petroleum products were up 8.9 percent.
 
Inventories. Total inventories of merchant wholesalers …