Industrial production increased 0.7 percent in September, after a revised gain of 1.2 percent in August. Manufacturing production increased 0.9 percent.
While the sequential growth is a positive sign for a ragged economy, many factors will play a role in determining whether that growth is sustainable, says Thomas J. Duesterberg, president and CEO of Manufacturers Alliance/MAPI.
“The inventory cycle has further to run, and this should sustain …
These select product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. Third quarter 2009 is compared with third quarter 2008, third quarter 2009 with second quarter 2009.
This table highlights key financial metrics and trading multiples for 27 publicly traded distributors in the industrial and building products industries up to Sept. 30, 2009. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.
These materials, prepared by Robert W. Baird & Co. for MDM, are for informational purposes only.
This article provides an overview of current credit conditions for distribution companies, their suppliers and customers. Included are results from a recent MDM survey, which asked about challenges, if any, in acquiring credit. The article includes data from the Federal Reserve and other organizations that have surveyed banks and businesses on credit trends.
In a recent MDM survey on the economy, 39 percent of respondents said credit has become less available in the past six months. Nearly 54 percent said that access to credit has not changed significantly, implying credit remains tight for most.
In the survey, respondents noted banks have grown stricter, increasing collateral requirements, lowering credit lines and increasing rates and fees.
“Credit institutions are no longer willing to loan on …
Dan Cantara, executive vice president of Commercial Services for First Niagara Financial Group Inc., Buffalo, NY, recently spoke with MDM about current banking conditions. First Niagara, with locations in New York and Pennsylvania, has benefited from the turmoil in the banking industry. While competitors big and small may be struggling, First Niagara has a healthy balance sheet and is looking for new customers. In fact, it will nearly double its assets when its second acquisition this year closes early 2010.
Here’s what Cantara says about banking in a difficult credit environment.
MDM: What do you want to see from a potential new customer?
DC: The key point is we’re looking for relationships, not …
Concern over the U.S. economy continues to be high among MDM readers, but more in a recent MDM survey expect the economy to be better than worse in the next six months.
Compared with one year ago, that’s an improvement. In the September 2008 survey of MDM readers, 28 percent expected the economy to grow worse; the September 2009 survey shows just 16.7 percent expect the economy to worsen. Most (47.5 percent) expect the economy to stay the same.
More than half are “very concerned” over the state of the economy, and a little more than a third are “concerned.”
Some respondents pointed to specific sectors: …
David McIlwaine, president of HVAC Distributors Inc., Mount Joy, PA, and Chrissy Nardini, president of American Metals Supply Co. Inc., Fenton, MO, recently spoke with MDM as part of an MDM interview series featuring association presidents. Nardini will replace McIlwaine as president of Heating, Airconditioning, & Refrigeration Distributors International at the association’s annual conference, “Turning Up the Heat on Recovery,” Nov. 1-4 in Orlando, FL.
MDM: This has been an interesting year. What are some of the issues that HARDI members have been dealing with over the last year?
David McIlwaine: Other than the general economic malaise, many of our members are tied to residential new construction markets. And in many areas, those markets collapsed 50 percent or 60 percent or more. That definitely provided challenges to our members.
In general as an industry, we’re going through the phase-out of the R22 refrigerant …
Anniversary of economy’s collapse has year-over-year comparables leveling out
The June Inflation Index, which measures a cross-section of industrial supplies, was up 0.06% from the previous month, and up 4.51% from June 2008.
This article looks at the roles of each part of the organization in strategic pricing. Using a sports analogy, the author refers to the Sales Function as the offense, the Operations Function as the defense, and the Purchasing Function as special teams. IT, Finance, Credit and HR play support roles, enabling the team to be in a position to win. And management is the coaching staff. Running a complex “play” like strategic pricing requires all functions to work in concert.
Much has already been written about the “science” of strategic pricing. I have written some of it, including Strategic Pricing for Distributors, published by the NAW Institute earlier this year. I intended the book as a do-it-yourself explanation of strategic pricing.
The magicians Penn & Teller famously perform a magic act that reveals the secrets of magic tricks. But even if you know the secrets, learning how to execute those illusions requires skill and experience. And even if you understand the relatively simple concepts behind strategic pricing, successful implementation is challenging work.
This article is part of an occasional MDM series on alternative energy markets.
Distributors and manufacturers responding to a recent MDM survey seemed practical in their approach to opportunities in alternative energy markets.
Some said they were not interested in going after these markets, not knowing where they were headed. But others were more optimistic, saying the niche is a growing one, will likely grow for some time, and they want a piece of the pie. As one manufacturer said: “The growth rate is hard to ignore.”
The growth rate may be hard to ignore, but with a rapid growth rate comes growing pains. And as detailed in the Sept. 10 issue of MDM, no one knows whether that growth rate will be sustainable leaving many to question how much and when they should invest in the space.
More distributors are diversifying into alternative and renewable energy markets. These markets vary in their maturity, and over the years, some have succeeded, while others have fallen off the grid. The dilemma over whether to invest in these markets when hype sometimes overshadows reality is a big one.
New demands on the power grid have led to new ideas on how to meet those demands. One way: the Smart Grid.
Recent MAPI/Manufacturers alliance report says as India’s economic growth accelerates, it is gaining interest from U.S. manufacturers as a production location and for its considerable sales potential.
U.S. manufacturers are beginning to bring back production from foreign countries as they take a holistic look at the costs and problems associated with outsourcing. About a year ago I was visiting a manufacturing plant that manufactured die-cutting presses. The CEO told me that most of the presses were manufactured in Taiwan, but there were a lot of problems trying to communicate the requirements, which resulted in quality problems.
The mergers and acquisitions market in distribution has changed dramatically in the past 24 months. While several deals were announced weekly in 2006 and 2007, the market flow today has slowed to a trickle. MDM spoke with distribution M&A experts about current conditions, and when they believe the market could turn around.
Wholesale distribution executives should not underestimate the impact of changes to compensation programs on their work force. To manage this sensitive area in these difficult times, a smart, proactive approach is needed to effectively manage human capital.
With today’s economic environment and turbulent times, it is no surprise that many companies have had to reshape their business as executives scramble to keep their companies afloat. Business leaders are challenged to find a balance between current finances and long-term strategy.
These business decisions also require a close look at the deployment of human resources, including difficult decisions regarding layoffs, restructuring compensation programs and pay practices, reductions in benefits, …
With the acquisition of ORCO Construction Supply, HD Supply White Cap Construction Supply business is taking advantage of ways to grow in a tough marketplace. ORCO filed for bankruptcy protection at the end of April; it will surely not be the last distributor to be purchased out of bankruptcy. White Cap president Tom Lazzaro spoke with MDM about the acquisition and other initiatives the distributor is pursuing.
CEO Joe DeAngelo told MDM after Home Depot sold HD Supply in 2007 that acquisitions would remain a key growth strategy for the wholesaler-distributor. He saw plenty of opportunities in particular for the company’s specialty construction business, White Cap Construction Supply.
Yet as the marketplace crumbled – led by the …
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