While revenue growth in wholesale distribution has outpaced overall economic growth in the U.S. for the past several years, the gap in 2015 was almost negligible, according to the newly released 2016 Economic Benchmarks for Wholesale Distribution report. Aggregate revenues of wholesaler-distributors increased by 0.2 percentage points more than nominal U.S. gross domestic product.
Weak commodity prices dragged down several sectors, including agriculture and metal service centers. But none of the 19 sectors included in the report suffered as much as oil & gas, which saw revenue decline nearly 35 percent. Oil & gas was the largest sector of wholesale distribution in 2014; in 2015, it fell to fourth-largest.
But the outlook isn't completely bleak. The devastating decline in crude oil prices appears to have bottomed, and the West Texas Intermediate price has seen a generally positive trajectory since April. But as one industrial distributor recently told MDM, the industry is still in the "hangover phase" and has a long way to go to adjust to the new market standards.
Many factors are driving the growth trajectory for wholesale distribution, something that's reflected in our forecasts for 2016 and 2017. Overall, 12 of the 19 sectors posted positive revenue growth in 2015, and we're forecasting that 14 sectors will have a positive 2016.
This is the 11th edition of this report, published each year to provide a comprehensive look at the wholesale distribution industry. The data in the report is based on information collected by the U.S. Census Bureau, the Bureau of Labor Statistics and the Bureau of Economic Analysis – and incorporates the periodic revisions released the U.S. government.
Distributors use the Wholesale Distribution Economic Trends Reports to benchmark their performance with data on how much sales and sales per employee have changed in their lines of trade, how much weekly earnings have changed, which end-markets are consuming their products, how sales and inventories have fared quarter-by-quarter, and how many companies are competing in their lines of trade.
Learn more about the 2016 Economic Benchmarks for Wholesale Distribution at mdm.com/2016ebwd.
And join us on Tuesday, June 14, at 1 p.m. ET for the 2016 Mid-Year Economic Update, a free webcast featuring Brian Lewandowski, research associate at the business research division of the University of Colorado Boulder's Leeds School of Business, and MDM Publisher Tom Gale. In the 60-minute program, Brian and Tom will discuss the economic drivers of the last year and the industry's outlook through 2017. Learn more or register now.
