Respondents to ASA’s monthly PULSE report reported a steep increase in average sales of 34.4 % for April 2021 vs. 2020.
On a year-to-date basis through the end of April, half of the respondents reported sales growth over 18.3%. On a trailing twelve-month basis (TTM), respondents reported average sales growth of 6.2% and a median of 7.3%. Half of the respondents reported TTM changes between 2.8% to 12.3% for sales growth for the 12 months through the end of April 2021 vs. 2020.
Inventory rose 14.9% from the previous year. The median three-months average days sales outstanding remained steady at 39 days for April.
On a trailing 12-month basis, respondents reported average sales increase of 7.3 % in April of 2021 as compared to 3.6% in March 2021 when compared to the 2020 data.
Inventories rose a whopping 14.9 % for April 2021 compared to a year ago, a notable increase from even March 2021, which was 9.6%. The median three-months days sales outstanding decreased to 39.2 days in April, as compared to 40.3 days in March of 2021.
The number of respondents showing a decrease in gross margin decreased to 16% in April, a 10% decline from March of 2021.
“Please note that April 2021 results reflect a full month of robust performance compared to April 2020 (a month in which much of the country was shut down depending on the location),” Industry Insights Vice President Greg Manns said. “This is reflected in the strong sales growth figures, reported by respondents in this month's results. Also, the YTD and TTM figures for much of the year will be impacted throughout 2021 as we continue to compare against a year that had multiple weeks if not months of closures or partial closures.”
“We continue to witness an upward trend in our Industry as is evident from the monthly Pulse data,” ASA Business Intelligence Analyst Ayesha Salman said. “The U.S. is showing signs of a strong recovery, and nationally we are expected to be back at pre-pandemic by this summer. The one big risk to watch out for is inflation locally and internationally, plus COVID-19 still poses a threat. Our members are already experiencing the positive impact of a good economy on their businesses, and the Pulse switching to a monthly reporting frequency is helping the participating members understand where the industry is going in a timely fashion."
GDP: The International Monetary Fund is not noted for its enthusiasm in forecasts, but they are predicting global growth at more than 6%, US growth at 6.4% and overall growth in the advanced economies of 5.3%.
Housing starts: Housing starts dropped dramatically – a decline of more than 13% M/M, and that marks the steepest decline in years. Three reasons jump out. The first is the cost of lumber that has caused builders to hold off on framing until prices drop. Second is that home prices have finally reached a point where buyers are getting pushed out; and finally, there is an acute shortage of labor – both skilled and unskilled.
Home improvement retail: The home improvement sector is also slowing and for much the same reason that housing has. Commodity prices are sky high and that has frightened off many potential projects. The slowdown in sales due to high prices has reduced the demand for projects tied to selling homes, and finally people are starting to shift their purchasing back to services and entertainment as opposed to refurbishing their homes.
ASA members doing business in the industrial PVF space reported an extremely sharp growth of 28.1% in April compared to a year ago. Trailing 12-month sales for ASA industrial PVF distributors showed a decline of 5%. Average inventories rose by 11.3%, while median change in ending inventory grew by 13.8%. The average days sales outstanding for that sector stood at 43.1 days.
41.7% of ASA industrial PVF distributors responding to the survey reported an increase in the total number of full-time-equivalent employees compared to a year ago, while 25.5% of industrial PVF distributors reported a lowering of gross margin percentage, and 58.3 % reported an increase as of April 30, compared to the same reporting period a year ago.
Looking forward over the next 18 months, the ASA Sales forecast continues to be bullish, although some sectors are going to remain weaker because of near-term supply chain disruptions, and significantly higher raw material prices continue to create much uncertainty about the outlook. Generally, most sectors remain in a strong growth trend and as the leisure and hospitality sector experiences improvement in growth over the next 6 months, that will boost spending.
Housing construction remains strong despite some near-term inflationary and inventory challenges. Builder sentiment was still strong in early May and single-family housing demand continues to surge. Some pockets of multi-family in some regions also improved in the latest data. Accommodative interest rates, trends pushing suburbanization, and the work-from-home trend is still creating strong demand for new homes. That should continue to be positive for all types of inputs into residential home construction for all of 2021.
Report Abusive Comment