Giving new life to the old saying, “Imagine if they gave a recession and nobody came,” early respondents to the survey for Electrical Wholesaling’s annual ranking of the 200 largest electrical distributors are surprisingly bullish about their sales fortunes for 2008.
The steady drumbeat of negative economic news is a downer to many electrical professionals and can shape their perception of the electrical market’s business climate. But approximately 63 percent of the 89 electrical distributors who have responded so far to the Top 200 survey expect their companies to have some sales growth. Twenty-seven distributors (30.3 percent of the respondents) expect sales to grow from 6 percent to 10 percent, and a surprising 12 percent of all the respondents expect sales growth in 2008 of at least 11 percent. Historically, the average rate of growth in the electrical wholesaling industry has been 4 percent to 8 percent.
To be sure, increases in copper and steel prices, as well as fuel costs, will bite into some of this sale growth, and the 35 respondents who said their company’s sales would be either flat or up 5 percent, may quickly find their 2008 growth negative if these price increases continue at the same rate through the year. But to see so many large electrical distributors reporting in with a positive sales forecast for 2008 is indeed a reason to be cheerful.
Of the 18 percent of the respondents (16 companies) who expected negative sales growth in 2008 were several utility specialists who were bracing themselves for double-digit declines.
The Top 200 ranking will hit the streets in EW’s June issue and will include an analysis of the impact of consolidation on the electrical wholesaling industry.