Modern Distribution Management, in conjunction with Robert W. Baird & Co., recently released the results of their survey of industrial distributor for the second quarter of 2021.  The overarching theme of the survey points towards a positive outlook for the rest of the year. Additionally, the majority, if not all of the industries participating, are expecting to experience continued growth through the remainder of 2021.

The survey summarized the results for six key industries with the industrial distribution sector. The following shows the key data points and issues facing each industry.

  • General Industrial
    • Increases in pricing, especially for PPE related products.
    • Supply chain issues
      • Manufacturers at capacity
      • Experiencing backlogs throughout the supply chain
    • 2021 Revenue growth forecasts in this sector range from 2% for Safety Products, up to almost 19% for OEM Fasteners
  • Electrical
    • Demand remains up for both residential and non-residential work
    • High demand, but experiencing product shortages and multiple price increases
    • Revenues expected to increase approximately 18% for the year
  • HVAC/Plumbing
    • Demand has continued to remain high, even within the residential sector.
    • Capitalizing on good margins
    • Growth forecasts range from 16% for HVAC to 18% for Plumbing
  • Building Products
    • Across the board, demand has remained high
    • Some of the sectors are experiencing supply shortages, especially with the roofing sector, where manufacturers continue to struggle to keep up with demand
    • Opportunities for those distributors that have inventory
    • Revenue forecasts show growth ranging from 12% for landscape supplies to 21% for wallboard/gypsum
  • Gases/Welding
    • Forecasted growth of 7% for gases and cylinder rentals and 11% for welding products
    • Having success passing along price increases from suppliers
    • Seeing increased sales in the industrial and medical markets
  • Pipe, Valves & Fittings
    • Starting to see the impacts of the recovery
    • Experiencing strong profit margins, as price increases related to inflation are passed along
    • Projected revenue growth of 15%

Overall, the outlook for industrial distribution appears to be strong throughout the year.  Companies will need to continue to monitor pricing and supply chains for shortages.  The survey also inquired about distributors top priorities for the rest of the year, a lot of the responses focused on employee health and finding good help.

Additional Resources

Join Network for Business Innovation CEO Mark Dancer on September 28 as he shares insights about the future of distribution, breaks down the key trends shaping the industry, and offers examples and ideas in an interactive virtual event. Learn more and register here.

Have questions about the MDM survey and 2021 outlook?  Talk to one of our Barnes Dennig wholesale distribution industry experts, or call us at 513-241-8313 to ensure your business is successfully transforming in the wholesale distribution landscape. We’re here to help.