2009 Distributor Re-Forecast
Six months later, the Annual Business Forecast looks at the rest of '09.
In mid-December 2008, Welding & Gases Today published the industry's Annual Business Forecast for 2009. Interviews of GAWDA members took place during the months of October and November. Half (50%) of the distributors interviewed projected that their sales in 2009 would increase at an average rate of 11%. While 29% believed their sales would stay similar to the year before, 18% forecasted their sales to be down, at an average rate of 9%. The title of that article, “Are We Having Fun Yet?” challenged readers to look at the months ahead and prepare for the challenges.
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In December 2008, 18% of Distributors believed their sales would be worse than the year before, predicting an overall average decrease of 9%.
In June 2009, 64% of Distributors expected their sales to be worse this year, at an average decrease of 12%. | |
Here we are, six months later. We've watched sales slow, construction stop, businesses close. Distributors have eliminated excess, stopped hiring, cut pay raises, put expansion plans on hold and hunkered down to fight for survival. In some areas, rentals and equipment repair are up. Expenses are trimmed and management is actively in front of customers pursuing prospects. Many believe their companies will come out of this period stronger.
Six months ago, 48% of Distributors said they would hire additional people in 2009. Now, only 10% plan to hire new employees. Some companies have laid off employees and reduced hours. Most have eliminated overtime.
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Welding & Gases Today went back to the distributors who participated in that annual survey. We wanted to know what they thought their business will look like for the remainder of 2009. The numbers are not that surprising, nor is the response of GAWDA members to this severe challenge. No one is taking this period lightly. All are rolling up their sleeves and doing what it takes. And as the song “Only the Strong Survive” goes, it is very clear from this mid-year re-forecast of the 2009 Business Forecast that GAWDA members truly are the strongest of the strong.
- In December 2008, 50% of Distributors expected their sales to increase, anywhere from 2% to 30%, with the average increase at 11%.
Six months later, only 27% of Distributors expected their sales to increase. While this percentage is lower, those forecasting an increase are expecting a higher average increase of 16%.
- In December, the #1 Challenge facing Distributors was Controlling Costs. Today in June, the #1 Challenge is Eroding
Profit Margins as more distributors slash prices to get a smaller piece of the pie.
- 65% of companies indicated in December 2008 that they would introduce new product lines and services. To find new sales opportunities, those companies are still moving forward, some at a slower pace, to deal with cash flow challenges.
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