Sample Report. In partnership with. Economic Benchmarks for Wholesale Distribution

Transcription

1 2018 Sample Report In partnership with Economic Benchmarks for Wholesale Distribution

2 Copyright and Terms of Use Copyright 2018 Modern Distribution Management. All rights reserved. This report is protected by copyright law and may not be copied or otherwise reproduced, repackaged, further transmitted, transferred, disseminated, redistributed or resold, in whole or in part, in any form or manner or by any means whatsoever, by any person without prior written consent from Modern Distribution Management. This report may not be used in commercial documents without the written permission of the copyright holder. You may make one machine readable copy and/or one print copy for your personal use. You may also include limited excerpts of this content in printed memos, reports and presentations for internal, non-commercial use. We ask that you attribute this information by including Source: Economic Benchmarks for Wholesale Distribution 2018 Modern Distribution Management. All rights reserved. A license must be purchased for every person who wishes to use the report within the same organization or enterprise. Disclaimer This report is for informational purposes only and is provided as is without any express or implied warranty. The analyses in this report are based solely on information and data that is in the public domain. Any conclusions, findings, opinions or recommendations are based on our own experienced and professional judgment and interpretations given the information available. While all information is believed to be reliable at the time of writing, the information provided here is for reference use only and does not constitute the rendering of legal, financial, commercial or other professional advice by Modern Distribution Management, MDM Analytics, or the authors. Any reliance upon the information is at your own risk, and Modern Distribution Management, and the authors shall not be responsible for any liability arising from or related to the use or accuracy of the information in any way. Modern Distribution Management does not make investment recommendations, in this report or otherwise. Nothing in this report should be interpreted as an opinion by Modern Distribution Management, MDM Analytics, Gale Media, Inc., or the authors on the investment prospects of specific companies. Copyright and Terms of Use / Disclaimer ii

3 Table of Contents About this Report...iv Wholesale Distribution Industry...1 National Economic Overview...14 Regional Economic Overview Definitions Pharmaceutical Wholesalers...24 Grocery and Foodservice Wholesale Distributors...34 Electrical and Electronics Wholesalers...46 Oil and Gas Products Wholesale Distributors...56 Motor Vehicles and Motor Vehicle Parts Wholesale Distributors...68 Industrial Distributors...81 Other Consumer Products Wholesale Distributors...93 Commercial Equipment and Supplies Wholesale Distributors Computer Equipment and Software Wholesale Distributors Miscellaneous Durable Goods Wholesale Distributors Agricultural Products Wholesale Distributors Apparel and Piece Goods Wholesale Distributors Metal Service Centers Beer, Wine and Liquor Wholesalers Hardware, Plumbing and Heating Equipment/Supplies Wholesalers Building Material and Construction Wholesale Distributors Chemicals and Plastics Wholesale Distributors Office Product Wholesalers and Paper Merchants Furniture and Home Furnishing Wholesale Distributors About the Authors Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Table of Contents iii

4 About the Economic Benchmarks for Wholesale Distribution The 2018 Economic Benchmarks for Wholesale Distribution is a comprehensive economic reference guide to the U.S. wholesale distribution industry compiled using a model originally developed by Dr. Adam Fein and Pembroke Consulting Inc. This is the 13th edition of this report, formerly known as the Wholesale Distribution Economic Trends Reports. It is published by MDM Analytics/ Gale Media, Inc., in conjunction with the Business Research Division of the Leeds School of Business at the University of Colorado Boulder. This report is based on information collected by the U.S. Census Bureau, the Bureau of Labor Statistics and the Bureau of Economic Analysis. The Economic Census provides the most reliable information about economic activity because it has participation rates of 90 to 100 percent and is validated through confidential sharing of company data with the Census Bureau. The figures may differ from data reported in trade association reports, which typically have lower participation rates than the census. The subsectors are based on the North American Industry Classification System (NAICS), although we have combined certain subsectors and unbundled others to better reflect actual economic arrangements. We have also renamed many sectors for ease of understanding. There are three significant methodological issues for readers to note: The 2018 reports reflect the most recent Annual Wholesale Trade Survey and the preliminary results of the last Economic Census. Data may differ from prior years reports due to ongoing government data revisions. All forecasts for revenue growth for each sector are based on proprietary statistical models of wholesale distribution sector revenues. There is no consistent, up-to-date information on the number of companies and branch locations. The data in this report are estimates based on proprietary statistical models. I hope you find this report to be a valuable and helpful planning tool for your company. Please contact me directly if you have any questions about this report. Thomas P. Gale CEO/Publisher Modern Distibution Management tom@mdm.com Some data were collected as part of the Economic Census and statistically adjusted based on proprietary analyses of the wholesale distribution industry Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. About the Economic Benchmarks for Wholesale Distribution Report iv

5 2018 Wholesale Distribution Industry (19 sectors) In partnership with Economic Benchmarks for Wholesale Distribution

6 Wholesale Distribution Industry Key Performance Statistics Measure Value % Change vs. Previous Year Period Industry Revenues ($B), 2017:Q4 Oct 2017 through Dec 2017 Industry Revenues ($B), 2017 Jan 2017 through Dec 2017 Industry Revenues ($B), 2018 Forecast Growth Jan 2018 through Dec 2018 Industry Revenues ($B), 2019 Forecast Growth Jan 2019 through Dec 2019 Gross Margin ($B), 2016 DATA REMOVED Jan 2016 through Dec 2016 Gross Margin as a Percent of Sales Jan 2016 through Dec 2016 Purchases ($B), 2016 Jan 2016 through Dec 2016 Industry Inventories ($B), Non-LIFO method Dec 2017 Inventory-to-Sales Ratio, 3-Month Moving Average Oct 2017 through Dec 2017 Total Employment, 2017:Q4 Oct 2017 through Dec 2017 Average Annual Revenues per Employee Jan 2017 through Dec 2017 Average Number of Employees per Establishment Sep 2016 through Sep 2017 Total Wages as a Percent of Revenue Sep 2016 through Sep 2017 Average Annual Pay (average weekly wages x 52) Jan 2017 through Dec Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 2

7 Wholesale Distribution Industry Commentary After declining in 2016, total revenues of wholesale distributors grew... COMMENTARY REMOVED 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 3

8 Wholesale Distribution Industry Commentary (continued) COMMENTARY REMOVED 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 4

9 Wholesale Distribution Industry Major Sectors Sector Summary Major Sector (Largest to Smallest Sector Revenues) 2017 Revenues ($B) % of Industry Revenues No. of Companies Avg. Gross Margin (2015) Pharmaceutical Wholesalers Oil and Gas Products Wholesale Distributors Grocery and Foodservice Wholesale Distributors Electrical and Electronics Wholesalers Motor Vehicles and Motor Vehicle Parts Wholesale Distributors Industrial Distributors Other Consumer Products Wholesale Distributors Commercial Equipment and Supplies Wholesale Distributors Miscellaneous Durable Goods Wholesale Distributors Computer Equipment and Software Wholesale Distributors Agricultural Products Wholesale Distributors Metal Service Centers Apparel and Piece Goods Wholesale Distributors Beer, Wine and Liquor Wholesalers Hardware, Plumbing, and Heating Equipment/Supplies Wholesalers Building Material and Construction Wholesale Distributors Chemicals and Plastics Wholesale Distributors Office Product Wholesalers and Paper Merchants Furniture and Home Furnishing Wholesale Distributors Total DATA REMOVED 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 5

10 Wholesale Distribution Industry Major Sectors Summary Trend Data % change vs. previous year Major Sector (Largest to Smallest Sector Revenues) Actual Revenues (2017) Real Revenues* (2017) Revenue Gap (Actual - Real) Employment (2017:Q4) Pharmaceutical Wholesalers Oil and Gas Products Wholesale Distributors Grocery and Foodservice Wholesale Distributors Electrical and Electronics Wholesalers Motor Vehicles and Motor Vehicle Parts Wholesale Distributors Industrial Distributors Other Consumer Products Wholesale Distributors Commercial Equipment and Supplies Wholesale Distributors Miscellaneous Durable Goods Wholesale Distributors Computer Equipment and Software Wholesale Distributors DATA REMOVED Agricultural Products Wholesale Distributors Metal Service Centers Apparel and Piece Goods Wholesale Distributors Beer, Wine and Liquor Wholesalers Hardware, Plumbing, and Heating Equipment/Supplies Wholesalers Building Material and Construction Wholesale Distributors Chemicals and Plastics Wholesale Distributors Office Product Wholesalers and Paper Merchants Furniture and Home Furnishing Wholesale Distributors Total 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 6

11 Wholesale Distribution Industry Major Sectors Revenue Forecast Summary % change in revenues vs. previous year Major Sector (Largest to Smallest Sector Revenues) 2017 Actual 2018 Forecast 2019 Forecast 2018 vs Pharmaceutical Wholesalers Oil and Gas Products Wholesale Distributors Grocery and Foodservice Wholesale Distributors Electrical and Electronics Wholesalers Motor Vehicles and Motor Vehicle Parts Wholesale Distributors Industrial Distributors Other Consumer Products Wholesale Distributors Commercial Equipment and Supplies Wholesale Distributors Miscellaneous Durable Goods Wholesale Distributors Computer Equipment and Software Wholesale Distributors Agricultural Products Wholesale Distributors Metal Service Centers Apparel and Piece Goods Wholesale Distributors Beer, Wine and Liquor Wholesalers Hardware, Plumbing, and Heating Equipment/Supplies Wholesalers Building Material and Construction Wholesale Distributors Chemicals and Plastics Wholesale Distributors Office Product Wholesalers and Paper Merchants Furniture and Home Furnishing Wholesale Distributors Total DATA REMOVED 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 7

12 Wholesale Distribution Industry Major Sectors Sector Growth vs. U.S. GDP Growth Major Sector (Highest to Lowest Correlation) Hardware, Plumbing, and Heating Equipment/Supplies Wholesalers Furniture and Home Furnishing Wholesale Distributors Chemicals and Plastics Wholesale Distributors Building Material and Construction Wholesale Distributors Motor Vehicles and Motor Vehicle Parts Wholesale Distributors Electrical and Electronics Wholesalers Industrial Distributors Apparel and Piece Goods Wholesale Distributors Metal Service Centers Miscellaneous Durable Goods Wholesale Distributors Office Product Wholesalers and Paper Merchants Commercial Equipment and Supplies Wholesale Distributors Grocery and Foodservice Wholesale Distributors Pharmaceutical Wholesalers Beer, Wine and Liquor Wholesalers Computer Equipment and Software Wholesale Distributors Other Consumer Products Wholesale Distributors Oil and Gas Products Wholesale Distributors Agricultural Products Wholesale Distributors Correlation of Real Revenue Growth with Real GDP Growth (2009:Q1 to 2016:Q4) DATA REMOVED 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 8

13 Wholesale Distribution Industry Major Sectors Employment Size Distribution of Wholesale Distribution Companies Number of Companies Major Sector (Largest to Smallest Sector Revenues) <20 Employees Employees Employees 500+ Employees Pharmaceutical Wholesalers Oil and Gas Products Wholesale Distributors Grocery and Foodservice Wholesale Distributors Electrical and Electronics Wholesalers Motor Vehicles and Motor Vehicle Parts Wholesale Distributors Industrial Distributors Other Consumer Products Wholesale Distributors Commercial Equipment and Supplies Wholesale Distributors Miscellaneous Durable Goods Wholesale Distributors Computer Equipment and Software Wholesale Distributors Agricultural Products Wholesale Distributors Metal Service Centers Apparel and Piece Goods Wholesale Distributors Beer, Wine and Liquor Wholesalers Hardware, Plumbing, and Heating Equipment/Supplies Wholesalers Building Material and Construction Wholesale Distributors Chemicals and Plastics Wholesale Distributors Office Product Wholesalers and Paper Merchants Furniture and Home Furnishing Wholesale Distributors Total DATA REMOVED 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 9

14 Wholesale Distribution Industry Actual Revenue Growth, 2004 to Present (not adjusted for inflation) Detail: Last 2 Years Q1 Q2 Q3 Q4 % change from year ago DETAIL REMOVED 04-Q1 04-Q2 04-Q3 04-Q4 05-Q1 05-Q2 05-Q3 05-Q4 06-Q1 06-Q2 06-Q3 06-Q4 07-Q1 07-Q2 07-Q3 07-Q4 08-Q1 08-Q2 08-Q3 08-Q4 09-Q1 09-Q2 09-Q3 09-Q4 10-Q1 10-Q2 10-Q3 10-Q4 11-Q1 11-Q2 11-Q3 11-Q4 12-Q1 12-Q2 12-Q3 12-Q4 13-Q1 13-Q2 13-Q3 13-Q4 14-Q1 14-Q2 14-Q3 14-Q4 15-Q1 15-Q2 15-Q3 15-Q4 16-Q1 16-Q2 16-Q3 16-Q4 17-Q1 17-Q2 17-Q3 17-Q Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 10

15 Wholesale Distribution Industry Real Revenue Growth, 2004 to Present (adjusted for inflation) Detail: Last 2 Years Q1 Q2 Q3 Q4 % change from year ago DETAIL REMOVED 04-Q1 04-Q2 04-Q3 04-Q4 05-Q1 05-Q2 05-Q3 05-Q4 06-Q1 06-Q2 06-Q3 06-Q4 07-Q1 07-Q2 07-Q3 07-Q4 08-Q1 08-Q2 08-Q3 08-Q4 09-Q1 09-Q2 09-Q3 09-Q4 10-Q1 10-Q2 10-Q3 10-Q4 11-Q1 11-Q2 11-Q3 11-Q4 12-Q1 12-Q2 12-Q3 12-Q4 13-Q1 13-Q2 13-Q3 13-Q4 14-Q1 14-Q2 14-Q3 14-Q4 15-Q1 15-Q2 15-Q3 15-Q4 16-Q1 16-Q2 16-Q3 16-Q4 17-Q1 17-Q2 17-Q3 17-Q Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 11

16 Wholesale Distribution Industry Employment Growth, 2004 to Present Detail: Last 2 Years Q1 Q2 Q3 Q4 % change from year ago DETAIL REMOVED 04-Q1 04-Q2 04-Q3 04-Q4 05-Q1 05-Q2 05-Q3 05-Q4 06-Q1 06-Q2 06-Q3 06-Q4 07-Q1 07-Q2 07-Q3 07-Q4 08-Q1 08-Q2 08-Q3 08-Q4 09-Q1 09-Q2 09-Q3 09-Q4 10-Q1 10-Q2 10-Q3 10-Q4 11-Q1 11-Q2 11-Q3 11-Q4 12-Q1 12-Q2 12-Q3 12-Q4 13-Q1 13-Q2 13-Q3 13-Q4 14-Q1 14-Q2 14-Q3 14-Q4 15-Q1 15-Q2 15-Q3 15-Q4 16-Q1 16-Q2 16-Q3 16-Q4 17-Q1 17-Q2 17-Q3 17-Q Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 12

17 Wholesale Distribution Industry Inventory-to-Sales Ratio, 2004 to Present 3-month moving average with Trendline DETAIL REMOVED Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 The inventory-to-sales ratio shows the seasonally-adjusted relationship of end-of-month values of inventory to monthly sales. These ratios (3-month moving average) indicate the number of months of inventory on hand relative to the sales for the month. For example, a ratio of 1.5 indicates that wholesale distributors have enough inventory on hand to cover one and a half months of sales Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Wholesale Distribution Industry 13

18 National Economic Overview Commentary GDP Unemployment Income Employment COMMENTARY REMOVED Wealth Credit 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. National Economic Overview 14

19 National Economic Overview National GDP Percent change, SAAR DETAIL REMOVED Source: Bureau of Economic Analysis and Consensus Forecasts Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. National Economic Overview 15

20 National Economic Overview National Employment Thousands, Month-over-Month, 12 Month Average DETAIL REMOVED 0 Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, and Moody s Analytics Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. National Economic Overview 16

21 National Economic Overview State Employment WA CA OR NV ID UT MT WY CO ND SD NE KS MN IA MO WI IL MI IN OH KY WV PA VA NY VT DE NH MA CT NJ MD ME RI AZ NM OK AR TN SC NC TX LA MS AL GA AK Percent Change Year-over-Year FL HI DETAIL REMOVED Source: Bureau of Labor Statistics (Seasonally Adjusted) Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. National Economic Overview 17

22 National Economic Overview Unemployment Rate Percentage of Labor Force DETAIL REMOVED U-6 8% U-3 4.1% U-3: Total unemployed, as a percent of the civilian labor force (This is the definition used for the official unemployment rate.) U-6: Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers Source: Bureau of Labor Statistics (Seasonally Adjusted) Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. National Economic Overview 18

23 Regional Economic Overview Commentary Personal Income Home Prices Wages Sources Employment COMMENTARY REMOVED Unemployment 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Regional Economic Overview 19

24 Definitions Gross Margins Sales minus cost of goods sold. Employment Paid employment consists of full- and part-time employees, including salaried officers and executives of corporations, who were on the payroll in the pay period including March 12. Included are employees on sick leave, holidays and vacations; not included are proprietors and partners of unincorporated businesses. Wages Hourly straight-time wage rate or, for workers not paid on an hourly basis, straight-time earnings divided by the corresponding hours. Straight-time wage and salary rates are total earnings before payroll deductions, excluding premium pay for overtime and for work on weekends and holidays, shift differentials and nonproduction bonuses such as lump-sum payments provided in lieu of wage increases. LIFO LIFO is a method of valuing inventory where the latest items of merchandise added to the inventory are the first ones taken out. Sources: United States Census Bureau ( and the Bureau of Labor Statistics ( Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Definitions 20

25 Sector NAICS Definitions 4-Digit Code North American Industry Classification System (NAICS) Definitions per the United States Census Bureau website 4231 Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of automobiles and other motor vehicles, motor vehicle supplies, tires and new and used parts Furniture and Home Furnishing Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of furniture (except hospital beds, medical furniture and drafting tables), home furnishings and/or housewares Lumber and Other Construction Materials Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of lumber, plywood, millwork and wood panels; brick, stone and related construction materials; roofing, siding and insulation materials; and other construction materials, including manufactured homes (i.e., mobile homes) and/or prefabricated buildings Professional and Commercial Equipment and Supplies Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of photographic equipment and supplies; office, computer and computer peripheral equipment; and medical, dental, hospital, ophthalmic and other commercial and professional equipment and supplies Metal and Mineral (except Petroleum) Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of products of the primary metals industries (including metal service centers) and coal, coke, metal ores and/or nonmetallic minerals (except precious and semiprecious stones and minerals used in construction) Household Appliances and Electrical and Electronic Goods Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of electrical apparatus and equipment, wiring supplies and related equipment; household appliances, electric housewares and consumer electronics; and other electronic parts and equipment Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Sector NAICS Definitions 21

26 Sector NAICS Definitions (continued) 4-Digit Code North American Industry Classification System (NAICS) Definitions 4237 Hardware, and Plumbing and Heating Equipment and Supplies Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of hardware; plumbing and heating equipment and supplies (hydronics); warm air heating and air-conditioning equipment and supplies; and refrigeration equipment and supplies Machinery, Equipment and Supplies Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of construction, mining, farm, garden, industrial, service establishment and transportation machinery, equipment and supplies Miscellaneous Durable Goods Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of sporting, recreational, toy, hobby and jewelry goods and supplies, and precious stones and metals Paper and Paper Product Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of bulk printing and writing paper; stationery and office supplies; and industrial and personal service paper Drugs and Druggists Sundries Merchant Wholesalers 4243 Apparel, Piece Goods and Notions Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of piece goods, notions and other dry goods; men s and boys clothing and furnishings; women s, children s and infants clothing and accessories; and footwear Grocery and Related Product Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of (1) a general line of groceries; (2) packaged frozen food; (3) dairy products; (4) poultry and poultry products; (5) confectioneries; (6) fish and seafood; (7) meats and meat products; (8) fresh fruits and vegetables; and (9) other grocery and related products Farm Product Raw Material Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of agricultural products (except raw milk, live poultry and fresh fruits and vegetables), such as grains, field beans, livestock and other farm product raw materials (excluding seeds) Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Sector NAICS Definitions 22

27 Sector NAICS Definitions (continued) 4-Digit Code North American Industry Classification System (NAICS) Definitions 4246 Chemical and Allied Products Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of chemicals, plastics materials and basic forms and shapes and allied products Petroleum and Petroleum Products Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of petroleum and petroleum products, including liquefied petroleum gas Beer, Wine and Distilled Alcoholic Beverage Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of chemicals, plastics materials and basic forms and shapes and allied products Miscellaneous Nondurable Goods Merchant Wholesalers This industry group comprises establishments primarily engaged in the merchant wholesale distribution of nondurable goods, such as farm supplies; books, periodicals and newspapers; flowers; nursery stock; paints; varnishes; tobacco and tobacco products; and other miscellaneous nondurable goods, such as cut Christmas trees and pet supplies Wholesale Electronic Markets and Agents and Brokers Source: United States Census Bureau ( Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Sector NAICS Definitions 23

28 2018 SECTOR SAMPLE This sector sample is a general representation of how each of the 19 sectors will appear. There may be variations in how the data is displayed sector to sector. In partnership with Economic Benchmarks for Wholesale Distribution

29 SECTOR SAMPLE Key Performance Statistics Measure Value % Change vs. Previous Year Period Sector Revenues ($B), 2017 Q4 Oct 2017 through Dec 2017 Sector Revenues ($B), 2017 Jan 2017 through Dec 2017 Industry Revenues ($B), 2018 Forecast Growth Jan 2018 through Dec 2018 Industry Revenues ($B), 2019 Forecast Growth Jan 2019 through Dec 2019 Gross Margin ($B), 2016 DATA REMOVED Jan 2016 through Dec 2016 Gross Margin as a Percent of Sales Jan 2016 through Dec 2016 Purchases ($B), 2016 Jan 2016 through Dec 2016 Industry Inventories ($B), Non-LIFO method Dec 2017 Inventory-to-Sales Ratio, 3 Month Moving Average Oct 2017 through Dec 2017 Total Employment, 2017:Q4 Oct 2017 through Dec 2017 Average Annual Revenues per Employee Jan 2017 through Dec 2017 Average Number of Employees per Establishment Sep 2016 through Sep 2017 Total Wages as a Percent of Revenue Sep 2016 through Sep 2017 Average Annual Pay (average weekly wages x 52) Jan 2017 through Dec Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 25

30 SECTOR SAMPLE Commentary Revenues for COMMENTARY REMOVED 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 26

31 SECTOR SAMPLE Commentary (continued) COMMENTARY REMOVED 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 27

32 SECTOR SAMPLE Subsector Summary Subsector (defined by primary products) Est Revenues ($B) % of Sector Revenues No. of Companies No. of Branches Construction Machinery and Equipment General Purpose Industrial Machinery and Equipment Farm and Garden Machinery and Equipment Aircraft and Aeronautical Equipment and Supplies Other Industrial Machinery and Equipment General Line Industrial MRO Supplies Oil Well, Refinery, and Pipeline Equipment and Supplies Materials Handling Machinery, Equipment, and Parts Service Establishment Equipment and Supplies Metalworking Machinery, Equipment, and Parts DATA REMOVED Fluid Power Machinery, Equipment, and Parts Mechanical Power Transmission (Bearings) Supplies Industrial Containers and Supplies Industrial Valves and Fittings (except Fluid Power) Custodial and Janitorial Equipment and Supplies Welding Supplies Food Processing Machinery, Equipment, and Parts Other Transportation Equipment and Supplies Marine Machinery, Equipment, and Supplies Total 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 28

33 SECTOR SAMPLE Summary Statistics Subsector (defined by primary products) Avg. Sales per Company Avg. Sales per Branch Avg. Sales per Employee Avg. Gross Margin (2015) Construction Machinery and Equipment General Purpose Industrial Machinery and Equipment Farm and Garden Machinery and Equipment Aircraft and Aeronautical Equipment and Supplies Other Industrial Machinery and Equipment General Line Industrial MRO Supplies Oil Well, Refinery, and Pipeline Equipment and Supplies Materials Handling Machinery, Equipment, and Parts DATA REMOVED Service Establishment Equipment and Supplies Metalworking Machinery, Equipment, and Parts Fluid Power Machinery, Equipment, and Parts Mechanical Power Transmission (Bearings) Supplies Industrial Containers and Supplies Industrial Valves and Fittings (except Fluid Power) Custodial and Janitorial Equipment and Supplies Welding Supplies Food Processing Machinery, Equipment, and Parts Other Transportation Equipment and Supplies Marine Machinery, Equipment, and Supplies Weighted Average 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 29

34 SECTOR SAMPLE Share of Revenue by End-Customer Market Subsector (defined by primary products) Building Materials & Contractor Supplies MRO Supplies & End-Use Equipment OEM & Production Materials Retail Stores & Dealers Export Sales Construction Machinery and Equipment General Purpose Industrial Machinery and Equipment Farm and Garden Machinery and Equipment Aircraft and Aeronautical Equipment and Supplies Other Industrial Machinery and Equipment General Line Industrial MRO Supplies Oil Well, Refinery, and Pipeline Equipment and Supplies Materials Handling Machinery, Equipment, and Parts Service Establishment Equipment and Supplies Metalworking Machinery, Equipment, and Parts DATA REMOVED Fluid Power Machinery, Equipment, and Parts Mechanical Power Transmission (Bearings) Supplies Industrial Containers and Supplies Industrial Valves and Fittings (except Fluid Power) Custodial and Janitorial Equipment and Supplies Welding Supplies Food Processing Machinery, Equipment, and Parts Other Transportation Equipment and Supplies Marine Machinery, Equipment, and Supplies 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 30

35 SECTOR SAMPLE Employment Size Distribution of Wholesale Distribution Companies Subsector (defined by primary products) <20 Employees Employees Employees 500+ Employees Construction Machinery and Equipment General Purpose Industrial Machinery and Equipment Farm and Garden Machinery and Equipment Aircraft and Aeronautical Equipment and Supplies Other Industrial Machinery and Equipment General Line Industrial MRO Supplies Oil Well, Refinery, and Pipeline Equipment and Supplies Materials Handling Machinery, Equipment, and Parts Service Establishment Equipment and Supplies Metalworking Machinery, Equipment, and Parts DATA REMOVED Fluid Power Machinery, Equipment, and Parts Mechanical Power Transmission (Bearings) Supplies Industrial Containers and Supplies Industrial Valves and Fittings (except Fluid Power) Custodial and Janitorial Equipment and Supplies Welding Supplies Food Processing Machinery, Equipment, and Parts Other Transportation Equipment and Supplies Marine Machinery, Equipment, and Supplies Total 2018 Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 31

36 SECTOR SAMPLE Actual Revenue Growth, 2004 to Present (not adjusted for inflation) Detail: Last 2 Years Q1 Q2 Q3 Q4 % change from year ago DETAIL REMOVED 04-Q1 04-Q2 04-Q3 04-Q4 05-Q1 05-Q2 05-Q3 05-Q4 06-Q1 06-Q2 06-Q3 06-Q4 07-Q1 07-Q2 07-Q3 07-Q4 08-Q1 08-Q2 08-Q3 08-Q4 09-Q1 09-Q2 09-Q3 09-Q4 10-Q1 10-Q2 10-Q3 10-Q4 11-Q1 11-Q2 11-Q3 11-Q4 12-Q1 12-Q2 12-Q3 12-Q4 13-Q1 13-Q2 13-Q3 13-Q4 14-Q1 14-Q2 14-Q3 14-Q4 15-Q1 15-Q2 15-Q3 15-Q4 16-Q1 16-Q2 16-Q3 16-Q4 17-Q1 17-Q2 17-Q3 17-Q Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 32

37 SECTOR SAMPLE Real Revenue Growth, 2004 to Present (adjusted for inflation) Detail: Last 2 Years Q1 Q2 Q3 Q4 % change from year ago DETAIL REMOVED 04-Q1 04-Q2 04-Q3 04-Q4 05-Q1 05-Q2 05-Q3 05-Q4 06-Q1 06-Q2 06-Q3 06-Q4 07-Q1 07-Q2 07-Q3 07-Q4 08-Q1 08-Q2 08-Q3 08-Q4 09-Q1 09-Q2 09-Q3 09-Q4 10-Q1 10-Q2 10-Q3 10-Q4 11-Q1 11-Q2 11-Q3 11-Q4 12-Q1 12-Q2 12-Q3 12-Q4 13-Q1 13-Q2 13-Q3 13-Q4 14-Q1 14-Q2 14-Q3 14-Q4 15-Q1 15-Q2 15-Q3 15-Q4 16-Q1 16-Q2 16-Q3 16-Q4 17-Q1 17-Q2 17-Q3 17-Q4 Real revenues equal actual revenues adjusted for product inflation using sector-specific price deflators. It is calculated by dividing the actual revenues by the price level, based on industry-specific price indices Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 33

38 SECTOR SAMPLE Employment Growth, 2004 to Present Detail: Last 2 Years Q1 Q2 Q3 Q4 % change from year ago DETAIL REMOVED 04-Q1 04-Q2 04-Q3 04-Q4 05-Q1 05-Q2 05-Q3 05-Q4 06-Q1 06-Q2 06-Q3 06-Q4 07-Q1 07-Q2 07-Q3 07-Q4 08-Q1 08-Q2 08-Q3 08-Q4 09-Q1 09-Q2 09-Q3 09-Q4 10-Q1 10-Q2 10-Q3 10-Q4 11-Q1 11-Q2 11-Q3 11-Q4 12-Q1 12-Q2 12-Q3 12-Q4 13-Q1 13-Q2 13-Q3 13-Q4 14-Q1 14-Q2 14-Q3 14-Q4 15-Q1 15-Q2 15-Q3 15-Q4 16-Q1 16-Q2 16-Q3 16-Q4 17-Q1 17-Q2 17-Q3 17-Q Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 34

39 SECTOR SAMPLE Inventory-to-Sales Ratio, 2004 to Present 3-month moving average with Trendline DETAIL REMOVED Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 The inventory-to-sales ratio shows the seasonally-adjusted relationship of end-of-month values of inventory to monthly sales. These ratios (3-month moving average) indicate the number of months of inventory on hand relative to the sales for the month. For example, a ratio of 1.5 indicates that wholesale distributors have enough inventory on hand to cover one and a half months of sales Modern Distribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. Industrial Distributors 35

40 About the Authors Data analysis in this edition of the Economic Benchmarks for Wholesale Distribution was produced by Modern Distribution Management (mdm.com) in collaboration with researchers at the Business Research Division of the Leeds School of Business at the University of Colorado Boulder. For questions regarding the Economic Benchmarks for Wholesale Distribution, call Serving Colorado since 1915, the Business Research Division (BRD) of the Leeds School of Business, University of Colorado Boulder, provides economic and demographic information needed by businesses, governments and nonprofit organizations. Specializing in economic and fiscal analysis, market research, and customized research projects, the division also produces the longest-running annual forecast of the state s economy. To learn more about the Business Research Division of the Leeds School of Business: Dr. Richard Wobbekind, Executive Director Brian Lewandowski, Associate Director colorado.edu/business/brd brdinfo@colorado.edu MDM Analytics is a market analytics firm for industrial and construction products in North America. For more than 25 years, MDM Analytics has increased top-line revenues, lowered cost of customer acquisition and shortened the selling cycle for industrial product marketers. Founded as Industrial Market Information in 1987, MDM Analytics has helped clients target high-potential customers and markets with industrial products market size analysis, data services, dashboards and sales force management tools. MDM Analytics is owned by Gale Media, Inc. Thomas P. Gale, CEO/Publisher MDM Analytics/Modern Distribution Management tom@mdm.com 2018 Modern DIstribution Management. Unlawful copying or sharing of this data is prohibited. See page ii for detailed terms of use. About the Authors 36

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