Supply House Times

What's The Buzz?

February 24, 2009

Recent conversations with industry people naturally revolved around the sorry state of our economy in general and construction-related markets especially. Here are some particulars that are on the minds of our industry’s distributors and manufacturers:

1. Banks aren’t the only ones reeling from the credit crunch. Many distributors are in the middle of a distressing supply chain in which projects are shut down or delayed because the owner or GC can’t gain financing, which cuts off pay to subs, who in turn stiff their suppliers, who then have trouble paying their vendors. It’s a reminder that the business of wholesale-distribution is not only about warehousing products, they play a banking role as well. Except nobody is looking to bail them out.

2. The PVF sector of the industry was going great until last fall, which one distributor described to me “is when we hit a wall going 100 mph.”

3. An interesting perspective was offered by a PVF manufacturer, who told me that all the talk of globalization tends to focus on imports, but his company and many cohorts benefited greatly from export sales to China and other foreign markets. With China’s economy as much in the doldrums as anywhere else, this is a double whammy.

4. Many manufacturers feel awfully queasy about the economic woes of Wolseley and its Ferguson behemoth. Some have as much as 20-25% of their sales in that one big basket, and if the unthinkable were to happen, those companies might have trouble surviving themselves.


Otherwise, there was a lot of talk about the weather.

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