The nation's economic woes broadened during the second quarter, with overall industrial weakness reflecting headwinds beyond the slumping oil & gas market and the strong U.S. dollar's negative effect on exports.
Distributors recorded just 1.8 percent revenue growth in the second quarter, according to respondents to the second-quarter 2015 MDM-Baird Distribution Survey. That's down from 2.7 percent the previous quarter and down from 3.5 percent in the second quarter of 2014.
While an improving commercial construction climate partially offset the tepid growth, the 1.8 percent revenue growth marked the second straight period of decline and a two-year low.
"We have seen a marked slowdown across virtually all industrial segments," said one survey respondent in industrial supply. "Oil & gas is obvious, but the slowdown has been more widespread in the last 45-60 days."
Pool & spa was the strongest performing subsector in the second quarter with 5.3 percent revenue growth. Plumbing (5 percent), datacomm (4.6 percent) and building materials (4.3 percent) also performed well during the period.
Two subsectors recorded negative revenue growth – mechanical/power transmission (-3.8 percent) and cutting tools (-1 percent). Hoses & accessories (0.7 percent) and MRO – manufacturing (0.8 percent) also performed poorly.
The disappointing performance doesn't bode well for the second half of the year. According to the last Baird survey: “2Q15 trends will set the tone for the remainder of 2015.” Distributors now project 2.9 percent growth in the third quarter and just 2.2 percent growth for the year, down from the 3.6 percent growth they projected just a few months ago.
The quarterly survey with Robert W. Baird & Co. included about 500 respondents in distribution (70 percent of respondents) and manufacturing in diverse sectors. The survey's goal is to gauge business trends and the outlook for the industry.
Read more about the results of the second-quarter 2015 survey, including results by subsector, in the July 25, 2015, issue of MDM Premium.
