NetPlus Industry Outlook Survey: Distributors Remain Optimistic as Recovery Efforts Get Underway
Sixty percent of members surveys report Q1 2021 sales improvements over Q1 2020.
NetPlus Alliance distributor members are optimistic about 2021 sales growth amid the COVID-19 recovery, according to the latest NetPlus Alliance quarterly Industry Outlook.
The NetPlus Alliance Industry Outlook is a quarterly report based on a survey of NetPlus distributor members that tracks business results and trends in the industrial and contractor supply markets. The survey was completed in May 2021 and the Outlook was based on first-quarter 2021 sales results.
The report found that 35% of distributor members reported a significant increase (8% or more) and 25% reported moderate gains (3-7%) in 2021 first-quarter sales compared with 2020. Reasons for the increase included:
- Ongoing COVID-19 recovery
- Pent-up demand
- New construction starts
- Increase in oil and gas activity
Purchases through NetPlus Alliance suppliers in the first quarter 2021 were up more than 13% over the same period in 2020, and 25% better than the first quarter of 2019.
Forty-six percent of distributors forecast a significant increase in sales for the full year of 2021 compared with 2020 and another 35% expect moderate growth due to the return of manufacturing, new business prospects, and new project starts. That said, 22% of distributors remained concerned about supply disruptions, higher cost of goods, customer caution, federal uncertainty, and a potential downturn.
“We are having a very nice rebound post-pandemic as the COVID crisis winds down, with over 60% of our distributors seeing sales increases compared with first-quarter 2020 sales,” said NetPlus Alliance Founder and Chairman Dan Judge. “That said, supply chain challenges and labor shortages remain major issues for distributors.”
Nearly 91% of distributors responding to the survey reported extended lead times and unpredictable supply, making on-time customer deliveries difficult. What’s more, over 51% of members reported higher inventory holdings due to supply shortages. Distributor members also expressed concern over declining work force participation, making it difficult to fill open positions required to meet customer demand.
About NetPlus Alliance
NetPlus Alliance builds relationships and provides opportunities for the advancement of member companies for their long-term success in the supply chain. With more than 100 years of combined industrial distribution experience, NetPlus Alliance negotiates improved pricing, rebates, and terms with more than 180 manufacturers on behalf of nearly 400 industrial and contractor supplies distributor members. Our members drive market growth and profitability through stronger channel partnerships, financial incentives, progressive marketing, joint sales planning, training programs, and business best practices.
Learn more about NetPlus Alliance at netplusalliance.com.
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