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ECONOMIC OUTLOOK REPORTS

MDM’s 4Q Economic Snapshot Webcast

It provides a thorough look at the state of the U.S. wholesale distribution economy today and what factors are influencing underlying demand.

2024 Annual MDM Economic Outlook

Our 2024 EOR is a comprehensive economic reference guide to the U.S. wholesale distribution industry and its many different verticals. It is comprised of 20 different subreports.
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Premium Monthly

MDM September 2024 Premium Monthly

This issue includes seven articles that span Stellar Industrial’s buy-and-build technology approach; what to know before expanding across state lines; corporate DEI pushback; Ferguson’s digital strategy; and more.
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Market Insight Reports

MDM 3Q 2024 MarketPulse Report

Find a wealth of data and analysis extracted from the 3Q24 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.

MDM 3Q 2024 M&A Report

See our top Premium M&A articles from July-September 2024, including QXO’s rollout plans; Sonepar’s Purchase of Summit Electric; What to know before expanding across state lines; and the latest EBITDA trading multiples.
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Case Studies

MDM Case Study: Ferguson

This case study explores the plumbing, HVACR, PVF and industrial supplies distributor’s past decade of growth through diversification, private branding and increased customer loyalty.
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Premium Events
Premium Articles
Technology
Minding the Gap Between Data & Action

Business intelligence does not necessarily translate into executive intelligence, and often the gap between the two is large, according to Indian River Consulting Group’s Mike Marks. Marks recently spoke about that “reality gap” and how to overcome it in a recent MDM Webcast, The Link Between Business Intelligence and Profitability, available at mdm.com/business-intelligence.

When it comes to distribution technologies, a lot of attention is frequently paid to the latest and greatest, such as e-commerce and mobile.

While these may pay off for distributors in the long run, the most immediate return on investment may come from technologies that have been around for a while – solutions that help distributors profit from the data already in their systems. Still, business intelligence does not necessarily translate...

Strategy
Customer Intimacy is Operational Excellence

The following is an excerpt of Brent Grover’s latest distribution management book, The Little Black Book of Strategic Planning for Distributors, published by Modern Distribution Management. In this article, Grover argues that distributors need to focus both on operational excellence and customer intimacy, rather than choosing one over the other.

In The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, authors Michael Treacy and Fred Wiersema adapted the three Michael Porter strategies into a choice of customer intimacy, operational excellence or product leadership. If you agree that product leadership isn’t a viable option for most distributors, the authors leave distributors with two alternatives: operational excellence or customer intimacy. In the following paragraphs I will argue for a third option.

Strategic choice No. 1 in The Discipline of Market Leaders is operational excellence, keeping costs down ...

Research & Analytics
Commentary: This Year, Talent is the Biggest Differentiator

So far 2013 has been somewhat turbulent. M&A activity has continued (MSC’s planned acquisition of Barnes, for example), as does overall economic/market uncertainty. It provides distribution executives with some choices to make about priorities and where to invest in initiatives that will produce the best return in 2013.

That’s the fancy way of posing the question: “How do we protect the revenue we have, and where are we going to...

Finance
Airgas Expands in Southern California
Airgas, Inc., Radnor, PA, has acquired Lehner & Martin, Inc, a Santa Ana, CA-based industrial gas and welding supply distributor with branches in Placentia, Gardena, and Chino, CA. L & M had sales of more than $13 million in the fiscal year ended March 31, 2007.
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The operations have been integrated into Airgas West, one of the regional companies that make up Airgas' distribution business.
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The transaction was the fifth acquisition completed since the start of Airgas' fiscal 2008 on April 1, 2007, with acquired sales now topping $378 million, including the Linde U.S. packaged gas acquisition announced earlier.
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Airgas, Inc. is a U.S. distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies. ...
Finance
Parker Hannifin Buys Mitos
Parker Hannifin Corporation, Cleveland, OH, supplier of motion and control technologies, has acquired Mitos Technologies, Inc.&nbsp ;
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Mitos manufactures fluid-handling products and systems designed specifically to meet the high purity requirements of the biotech industry, including tubing and hose, valves, pumps and molded components.&nbsp ;
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Mitos had revenues of $5.5 million in 2006 and employs 40 people at its headquarters in Phoenixville, PA.
<br ...
Finance
Carrier Corp., Supplier of HVAC Products, to Buy Distributor
Carrier Corp. has agreed to buy E.B. Ward & Company/Valair, a Carrier distributor of residential, light commercial and commercial products. Carrier, a unit of United Technologies Corp., is a supplier with 200 locations in more than 20 U.S. states and Canada.
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The acquisition of E.B. Ward and Valair will strengthen our rapidly expanding sales and distribution network in California," said Geraud Darnis, president of Carrier Corp. "This will enable Carrier to serve our customers directly in this large and strategically important market."


E.B. Ward and Valair, with 140 employees and combined sales of $150 million, serve Carrier customers in Northern California and parts of Nevada.


Carrier Corp., headquartered in Farmington, CT, is a provider of ...
Finance
Ultratape Industries Sold to Delphon
Salem, OR-based Ultratape Industries Inc., a manufacturer of adhesive tapes used in cleanroom environments, has been sold to Hayward, CA-based Delphon Industries LLC.
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Ultratape produces pressure sensitive adhesive tapes for use in semiconductor cleanrooms, labs, pharmaceutical manufacturing and other particle-free and static-free environments. ...
Free
Supreme Court: Minimum Price Resale Agreements Allowed (updated)


The U.S. Supreme Court has made it easier for manufacturers to set minimum resale prices by overturning the per se" illegality of minimum resale price agreements.
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Instead, the Supreme Court ruled that challenges to minimum resale prices will be judged on a case-by-case basis by the "rule of reason," a more flexible legal doctrine that requires the challenger to prove price-setting was anticompetitive and did economic harm.
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"Per se" was a much stricter enforcement that assumed that minimum price setting agreements were on their face illegal, regardless of circumstances. By changing the judgment from "per se" to "rule of reason," the Supreme Court has made it more difficult for challengers of the law to win and less risky for manufacturers to set ...
Finance
ABC Supply Co. Inc. Buys Ashley Aluminum
ABC Supply Co. Inc., Beloit, WI, has purchased Ashley Aluminum LLC.&nbsp ; Ashley Aluminum's 48 branches in Florida, Texas, Alabama and Georgia are now part of ABC Supply's Town & Country Industries division.
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ABC Supply is a $3 billion distributor of roofing, siding, windows and other select exterior building products.&nbsp ; ABC Supply's Town & Country division is a wholesale distributor of aluminum and building products.&nbsp ; These include awnings, pool enclosures, screen doors and other patio products; shutters and Eyewall Armor hurricane protection products; extrusions, custom shapes and aluminum products for the industrial market; and such exterior building products as decking, railing and vinyl siding.
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ABC Supply operates more than 350 branches ...
Free
U.S. Nail Producers File Anti-Dumping Suit Against China, UAE
Five U.S. producers of steel nails have filed antidumping duty petitions alleging that dumped imports of nails from China and the United Arab Emirates (UAE) are causing material injury to the domestic industry. The petitioners allege antidumping margins of 59 percent to 136 percent for China and 98 percent to 114 percent for the UAE.
The petitioners are Mid Continent Nail Corporation, Poplar Bluff, MO; Davis Wire Corporation, Irwindale, CA; Gerdau Ameristeel Corporation (Atlas Steel & Wire Division), Tampa, FL; Maze Nales (Division of W.H. Maze Company), Peru, IL; and Treasure Coast Fasteners, Inc., Fort Pierce, FL.


Domestic nail producers contend that unfairly priced imports of steel nails have injured the U.S. industry by undercutting their prices and taking sales based ...
Finance
ITT Corp. to Buy International Motion Control for $395M
ITT Corporation, White Plains, NY, has agreed to acquire International Motion Control, Buffalo, NY, for $395 million. IMC is a supplier of motion control products with 2006 revenues of $200 million.

The IMC acquisition aligns exceedingly well with our strategy to grow the ITT Motion and Flow Control business globally. IMC adds a complementary mix of highly engineered, mission-critical products to expand our core capabilities in specialty energy absorption and motion control applications," said Steve Loranger, president and CEO of ITT.

IMC is a manufacturer of specialty energy absorption, industrial and aviation control and automation technology under the brand names of Burny, Enidine, Compact Automation, CMC, and Midland-ACS and others. Under brand names including ...
Finance
Nucor to Buy Magnatrax for $280M
Nucor Corp., Charlotte, NC, has agreed to buy Magnatrax Corporation, a provider of metal building systems in the North American non-residential market, for $280 million.
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Magnatrax has seven fabricating plants, as well as service centers and transport facilities, throughout the U.S. It operates through its American Buildings Company, Kirby Building Systems, Gulf States Manufacturers and CBC Steel Buildings subsidiaries and divisions.
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The supplier sells, engineers and fabricates custom metal roofing systems for new and retrofit construction and sells third-party metal building components.
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The acquisition of Magnatrax is an important growth opportunity for one of our core downstream businesses," said Dan DiMicco, Nucor's president and CEO. ...
Finance
Home Depot Sells Off Supply Unit

After months of speculation, The Home Depot has agreed to sell its wholesale division, HD Supply, and bring its focus back to the performance of its retail core. Three private equity firms will buy the $12 billion unit.

The Home Depot, Atlanta, GA, has agreed to sell HD Supply to a team of private equity firms – Bain Capital LLC, Carlyle Group and Clayton Dubilier & Rice Inc. – for $10.3 billion, or roughly 10X-12X EBITDA. The firms are splitting the investment equally.

The sale has been expected for weeks now, with a number of private equity firms rumored to have bid for the unit and several to have bowed out due to the down housing market – one of HD Supply's core customer bases. HD Supply reported a decrease in organic sales in the recent ...

Operations
The Gray Market and Distribution

The gray market is ill-defined and can range from legitimate goods intended for sale elsewhere sold in an unauthorized area, to outsourced manufacturers who generate more product than that ordered by an OEM, to goods that are remanufactured after use, to pure piracy. Here's a look at a recent case between a manufacturer and distributor.

Recently, Hewlett-Packard resolved a gray market" lawsuit that it filed in a federal district court in Tennessee against one of its by-then terminated distributors and one of the distributor's customers.

In essence, HP claimed that its distributor violated the terms of its authorized reseller agreement by purchasing products at deep discounts and then selling the products to a customer not authorized by HP.

The ...

Free
Schneider Electric Continues Campaign Against Counterfeiting

North American Breaker Co. (NABCO) has been enjoined in federal court from buying or selling virtually all Square D QO circuit breakers, and two other companies -CES Liquidating Inc. and TES Liquidating LLC -have been enjoined from selling any of Schneider Electric's Square D products.


Square D filed suit against NABCO on July 26, 2006, contending that the company placed 50,594 counterfeit Square D circuit breakers into the field. In the suit, Square D alleged that NABCO was guilty of trademark infringement.


Counterfeit Square D products pose serious health and safety hazards to innocent customers," said Bill Snyder, vice president-channel distribution for the Schneider Electric North American Operation Division. "Through this lawsuit and others like it, Square D has ...
Finance
Commentary: Dust Won’t Settle on HD Supply

Be careful not to get a sugar high from the HD Supply spin-off announced this past week. After a deal of this magnitude, it's easy to get excited about what it means once the dust settles. But the dust won't settle on HD Supply. If anything, the non-contributing or distracting units will be shed and a leaner, more focused business will emerge. It was not purchased to be gutted or dismantled. The remaining entity, while smaller in size, will likely continue as the lead consolidator in a narrower band of distribution verticals.


The deal will have a large impact in a few sectors, and virtually no impact in others beyond the perceived valuation halo effect. Some had anticipated the price for HD Supply might cool slightly due to the weakness of residential markets in North America. ...
Finance
SKF Acquires Baker Instruments Co.
SKF has acquired Baker Instruments Company, Fort Collins, CO, a manufacturer of test and diagnostic instruments for electric motor assessment. Baker has sales of $11 million.
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This move into electric motor diagnostics is important to our new Energy Efficiency solutions business, and is in line with the SKF Group's move towards supporting our customers in their Sustainability efforts," said Phil Knights, president, SKF Service Division.
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Baker's sales are mainly focused on the industrial motor users in the U.S.
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SKF paid $14 million for the company. Baker will be part of SKF Reliability Systems within the Service ...
Finance
New Owners: HD Supply Will Maintain Acquisitive Strategy
HD Supply's new owners said that it is premature to say whether they will divest any of the $12 billion distributor's assets after taking full ownership, said David Novak, a partner at Clayton Dubilier & Rice, one of the three private equity firms that have agreed to buy the unit from The Home Depot Inc. for $10.3 billion.
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Bain Capital LLC, Carlyle Group and CD & R are splitting the investment evenly, Novak said.
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Though there are no immediate plans for HD Supply's current assets, the new owners do plan to continue building the company through acquisitions. That we will certainly do," Novak told MDM. "Local scale is very important for productivity and service levels."
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That means that HD Supply, with $12 billion in sales in 2006, will continue ...
Finance
Reliance Steel Agrees to Buy Clayton Metals
Reliance Steel & Aluminum Co., Los Angeles, CA, has agreed to acquire Clayton Metals, Inc., Wood Dale, IL.
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Clayton Metals specializes primarily in the processing and distribution of aluminum, stainless steel and red metal flat-rolled products, custom extrusions and aluminum circles through its metals service center locations in Wood Dale, IL; Cerritos, CA; High Point, NC and Parsippany, NJ.
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Clayton Metal's sales for the 12 months ended Dec. 31, 2006, were about $123 million. Current management is expected to remain in place.
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Reliance Steel & Aluminum Co. is one of the largest metals service center companies in the U.S. Through a network of more than 180 locations in 37 states and Belgium, Canada, China and South Korea, the company ...
Finance
Home Depot: Selling Supply Not an Easy Decision
Home Depot CEO Frank Blake said Wednesday that selling HD Supply in pieces would have been&nbsp ; time-consuming and&nbsp ; distracting, with an added cost of separating the businesses. An IPO would have resulted in a multiple discount relative to the sale of the entire business.
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This was not an easy decision," Blake said about the announcement Tuesday that Home Depot would sell its $12 billion wholesale division in its entirety for $10.3 billion to a group of three private equity firms. "(HD Supply chief) Joe DeAngelo and his team have built a world-class operation over the last few years. We gave careful consideration to a number of options, including holding onto the business."
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The three private equity firms buying HD Supply for roughly 10X-12X EBITDA are ...
Finance
Takeaways from the $10B HD Supply Deal
Home Depot's announcement that it is selling its wholesale division HD Supply for $10.3 billion to a trio of private equity firms -Bain Capital, Carlyle Group and Clayton Dubilier & Rice -is hardly a surprise, given the media coverage that led up to it. Though we don't know all the details yet, there are already a few takeaways from the news:
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1. As Grainger President and COO Jim Ryan said in mid-May (Grainger: Consolidation is Changing Marketplace), just because HD Supply has been been sold does not mean that it disappears as a player in the market. Still, HD Supply's new owners will have the same ...
Finance
Home Depot to Sell HD Supply for $10.3B (updated)

The Home Depot, Atlanta, GA, has agreed to sell HD Supply to a team of private equity firms -Bain Capital LLC, Carlyle Group and Clayton Dubilier & Rice Inc. -for $10.3 billion, or roughly 10X-12X EBITDA.
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The sale has been expected for weeks now, with a number of private equity firms rumored to have bid for the unit and several to have bowed out due to the down housing market -one of HD Supply's key customer bases. HD Supply reported a decrease in organic sales in the recent quarter.
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For that reason, the firms likely paid closer to 12X EBITDA, according to Jim Miller, principal and a managing director at investment banking firm Vetus Partners, Cleveland, OH. When they started this process, I believe they were touting approximately $1 billion of EBITDA ...
Finance
Eaton Buys Pulizzi Engineering
Diversified industrial manufacturer Eaton Corporation, Cleveland, OH, has acquired Pulizzi Engineering, a manufacturer of AC power distribution, AC power sequencing, redundant power and remote-reboot power management systems. Pulizzi Engineering had 2006 sales of $12 million and is in Santa Ana, CA.
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Eaton Corporation is a diversified industrial manufacturer with 2006 sales of $12.4 billion. ...
Economic Trends
Baird Survey: Outlook More Positive Than Current Trends
The first quarter Baird Industrial Distribution Survey, from Robert W. Baird & Co. Inc., indicates revenues were down significantly during the quarter, with both the six-month and full-year forecasts slightly better than current trends.
 
Pricing and gross profit margins appear to be holding relatively steady. The survey also shows 68% of respondents expect some level of benefit to their business as a result of U.S. Government stimulus efforts.
 
Baird's Industrial Distribution Research Team, led by Senior Research Analyst David Manthey, CFA, collected feedback on first quarter results from nearly 300 independent and captive distributors with combined annual revenue in excess of $40 billion. Key survey findings include:
 
·   ...
Research & Analytics
Survey: Two-thirds of Respondents Will Negotiate More SPAs
A recent industry survey looked at Special Pricing Allowances. According to the survey by Allen Ray Associates and Channel Marketing Group, about a third of distributor respondents have more than 250 individual SPA, customer-defined, agreements. Another 13.6% had more than 100 SPAs.
 
About two-thirds say that the number of SPAs they negotiate will increase. Just 9.1% feel that they will eventually have fewer SPA agreements.
 
Distributors in the survey ranked SPAs as a 7.64 on a scale of 1-10 in importance to their current and future profitability.
 
"SPAs can be a competitive advantage for manufacturers and distributors to take market share when appropriately used," Allen Ray says. "The key is distributors claiming their funds to ensure ...
Economic Trends
Canada Industrial Product Price Index Up in February
In February, Canada's Industrial Product Price Index (IPPI) rose 0.4% compared with January, due to both the depreciation of the Canadian dollar against the US dollar and increases in the prices for precious metals and petroleum products, according to Statistics Canada. The Raw Materials Price Index (RMPI) advanced 1.7 % compared with January, pushed up by rising crude oil prices.
 
The IPPI rose 0.4% in February, a modest upturn following the stability in the index in January and the declines of 2.7% and 2.2% recorded in November and December respectively.
 
Motor vehicles and other transport equipment rose 1.1% as a result of the depreciation of the Canadian dollar in relation to its US counterpart. The prices for primary metal ...
Free
Responding to Delayed Hospital Spending, Cardinal Health Cuts Costs
Drug distributor Cardinal Health, Dublin, OH, says that when it spins off its Clinical and Medical Products businesses later this year it will reduce its global workforce by 800 over six months and eliminate an additional 500 positions through normal attrition and not filling open roles. The distributor also plans to implement cost control measures and reductions in discretionary spending.
 
The actions are in response to a "delay in hospital capital spending" specifically, and the decline in the global economy generally, according a press release.
 
Cardinal said back in January that the spending delay is only a "temporary concern," according to an article at WSJ.com.
 
Cardinal Health, Inc. is a $91 billion global ...
Economic Trends
New-Home Sales Climb: Has the Market Hit Bottom?
For the first time in seven months, the Commerce Department reported that new-home sales increased 4.7% in February to a seasonally adjusted rate of 337,000 units. It's still a long way from where sales were, but Joe Robson, chairman of the National Association of Home Builders, is taking it as a sign that the market is finally hitting bottom, according to a statement posted to NAHB.org.
 
One possible contributor to the upswing: Prices finally may be low enough to draw buyers back into the marketplace for new homes. According to the S&P/Case-Shiller Home Price Indices released on Tuesday, prices for new homes continued to fall in January to lows not seen since 2003 (based on the composite indexes). The 20-city composite index has fallen 19% since January 2008; it ...
Economic Trends
Commentary: A Positive Spin on News in a Negative Time
In a short time, we have grown accustomed to reading (and in my case, writing) articles and headlines filled with words like, decrease, "decline" and "fall." That's why when, as reported this month, housing starts saw a slight increase, and new orders for durable goods went up, the words "unexpectedly" and "surprising" started to appear. Confidence went up, at least a little - badly needed in our battered economy.
 
That said, as soon as the word "increase" and all its synonyms came back, however briefly, there were plenty of economists and analysts ready to moderate our excitement that things might finally be hitting rock bottom. "The modest signs of stability in the U.S. economy are ...
Economic Trends
Global Report: Mexico Hit by Export Slowdown to U.S.
This is part of an MDM series of articles looking at growth opportunities globally.
 
The remaining optimism at the beginning of the global financial and credit crisis very often came from emerging markets. Though those markets' growth slowed, they still saw growth, contrary to the negative trends seen in the U.S. Growth forecasts for Brazil, for example, were revised downward, but remained positive, and India continued to see investment growth.
 
And another emerging market - Mexico - continued to steadily plod along even as its trading partners suffered from a barrage of bad news. The picture has since darkened for many of these countries.


Until a few months ago, it was believed that the emerging markets, and ...
Economic Trends
GDP Shrinks 6.3% in Fourth Quarter 2008
Real gross domestic product - the output of goods and services produced by labor and property in the U.S. - decreased at an annual rate of 6.3 percent in the fourth quarter of 2008, (from the third quarter to the fourth quarter), according to final estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP decreased 0.5 percent.
 
These GDP estimates are based on more complete source data than were available for the preliminary estimates issued last month. In the preliminary estimates, the decrease in real GDP was 6.2 percent.
 
The decrease in real GDP in the fourth quarter primarily reflected negative contributions from exports, personal consumption expenditures, equipment and software, and residential fixed investment that ...
Economic Trends
Monthly Wholesale Trade: January 2009
January 2009 sales of merchant wholesalers, except manufacturers' sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $326.1 billion, down 2.9 percent from the revised December level and were down 15.4 percent from January 2008, according to the U.S. Census Bureau.
 
January sales of durable goods were down 6.5 percent from last month and were down 17.3 percent from a year ago. Compared with last month, sales of machinery, equipment, and supplies were down 10.8 percent. Sales of nondurable goods were up 0.3 percent from last month, but were down 13.7 percent from last year. Sales of chemicals and allied products were down 4.9 percent from last month, while sales of drugs and druggists' ...
Economic Trends
U.S. Conference Board, Canadian Composite Indexes Decline at Start of Year
U.S.
Each of the three economic indexes provided by The Conference Board posted declines of 0.4 percent for the month. The Conference Board Leading Economic Index February decline follows a slight increase in January. Between August 2008 and February 2009, the index fell 2.1 percent, faster than the decline of 1.6 percent (a -3.1 percent annual rate) for the previous six months. In addition, the weaknesses among the leading indicators have remained widespread. The Leading Economic Index for the U.S. now stands at 98.5, continuing a downward trend that began in July 2007.

Six of the indicators that make up the LEI increased in February, including the interest rate spread, index of supplier deliveries (vendor performance), building permits, real money supply, ...
Economic Trends
New Orders for Durable Goods Go Up in February
New orders for manufactured durable goods in February increased $5.5 billion or 3.4% to $165.6 billion, the U.S. Census Bureau announced in the advance report on Manufacturers' Shipments, Inventories and Orders. This increase follows six consecutive monthly decreases, including a 7.3% January decrease. Excluding transportation, new orders increased 3.9%. Excluding defense, new orders increased 1.7%.
 
Cliff Waldman, economist for the Manufacturers Alliance/MAPI, said that the "welcome turn in big ticket demand" should be "interpreted with caution," though he does point out that it may indicate that the U.S. is close to or at the bottom of the business cycle.
 
"The modest signs of stability in the U.S. economy are early and could be ...
Economic Trends
Economic Indexes Continue Downward Trend
Economic indicators continued their downward trend in February, according to The Conference Board and Statistics Canada.
 
In the U.S., all three indicators from The Conference Board - the Leading Economic Index, Coincident Economic Index and the Lagging Economic index - declined by 0.4% for the month. The LEI has fallen 2.1% in the past six months; the CEI has dropped 3.1%.
 
Canada's February composite leading index fell 1.1% after a 0.9 percent decrease in January, with 9 of the 10 components declining. The housing and stock markets continued to post the largest declines, while losses in manufacturing steepened as the auto industry began to implement extensive shutdowns at the turn of the year. New orders in ...
Human Resources in Wholesale Distribution
Execs: Right Leadership, Training Key to Retaining the Right People
Two recent MDM interviews offered some perspective on retaining quality employees.
 
Graybar Senior Vice President and CFO Beatty D'Alessandro told me (at the recent NAW meeting in January) that the company keeps its focus on drawing employees who take a long-term view. He says finding the right people with the right values is crucial from the get-go, but that providing the right training and the right opportunities are just as important in keeping the right people in place. He says: "The model is built around people who are going to come and stay versus people who job-hop around the industry."
 
In the latest issue of MDM, Grainger's new president of international businesses, Court Carruthers, says that nurturing employee development is a passion of his. A ...
Economic Trends
Chicago Fed Midwest Manufacturing Index Falls 5.9% In January
The Chicago Fed Midwest Manufacturing Index declined 5.9% in January, to a seasonally adjusted level of 85.6 (2002 = 100). Revised data show the index decreased 3.9% in December, to 91.0.
 
The Federal Reserve Board's industrial production index for manufacturing fell 2.6% in January. Regional output in January was down 21.8% from a year earlier-lower than the 13.0% decrease in national output.
 
Regional auto sector production dropped 20.0% in January after moving down 1.8% in December. The nation's auto output decreased 10.1%. The Midwest's automotive output was down 42.2% relative to its year-ago value, and the nation's auto output was down 24.3%.
 
The region's steel sector output moved down 4.9% in January after ...
Economic Trends
Behind the Surprising Uptick in February Housing Starts
Housing starts went up unexpectedly in February (+22.2% from January), but were still down 47.3% from February 2008. And while to some this might trigger some hope that we're reaching the bottom, as the Chicago Tribune and other papers around the country have noted, most of the gain came from the multifamily sector, which includes apartments and condominiums. Starts in that sector rose more than 80%; single-family homes only gained 1.1%. On the bright side, that 1.1% is an improvement over the double-digit drops we have been seeing the past several months.
 
Economists are mixed as to whether the slight ...
Free
Finding Opportunity in Inventory
Distributors are slimming down.
 
The sudden drop in sales in November left many distributors with too much inventory and not enough demand. Maximizing cash flow has become the name of the game. To do this, distributors are paring down and better managing inventory. They are shortening their forecasting time frame (to consider just the past three months rather than the past half year or more), analyzing their replenishment processes (in many cases ordering more frequently), improving communication with vendors and returning to basic best practices in inventory management. Many are also digging more deeply into their technology tools to find ways to increase efficiencies in the inventory management ...
Economic Trends
Wholesale Prices Rise 0.1% in February
Wholesale prices increased 0.1% in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This rise followed a 0.8-percent increase in January and a 1.9-percent decline in December.
 
At the earlier stages of processing, prices received by manufacturers of intermediate goods decreased 0.9% in February after falling 0.7% in the previous month, and the index for crude materials declined 4.5% following a 2.9-percent decrease in January.
 
The slower rate of increase in finished goods prices was led by the index for energy goods, which rose 1.3% in February after climbing 3.7% in the preceding month. Capital equipment prices also moved up less, rising 0.1% after increasing 0.5% in January. The index for consumer foods ...
Economic Trends
Canadian Manufacturing Sales Fall 5.4% in January
Source: Statistics Canada

Canadian manufacturing sales decreased 5.4% to $41.7 billion in January, falling to the lowest level in almost 10 years. Motor vehicle and motor vehicle parts industries, particularly in Ontario, reported record decreases during the month. Excluding motor vehicles and parts and accessories, manufacturing sales decreased a more moderate 1.2% compared with December.
 
Constant dollar manufacturing sales, which are measured in 2002 prices, fell 6.4% to $38.1 billion in January. This was the sharpest decrease in constant dollar sales since the current series started in 1997.

At the industry level, sales in 14 of 21 manufacturing industries decreased ...
Economic Trends
A New Model Needed in the Steel Industry
Steel prices have been wild this past year - from record highs in mid-July to the current barely-breakeven lows. Steelmakers have seen a dramatic decline in demand, with global output sinking about 25% in January and North American output down 50%, according to Reuters. The unprecedented volatility has left many people related to the steel industry wondering where things might go next.
 
While no one knows that answer, what they can do is prepare for the new economic reality that will come out of this global financial and economic crisis. This was the message presented by Pierre Mangers of PricewaterhouseCoopers Luxembourg at the Handelsblatt Stahlmarkt conference in Germany earlier this month.
 
Mangers told attendees that the steel industry needs a new ...

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