Respondents to ASA’s monthly sales report reported a median sales increase of 22.2% for March 2022 vs March 2021.
Industry Insights, which produces the ASA monthly sales report for ASA distributor members, noted the March 2022 results reflect another month of robust performance compared to the same month a year ago. When compared to last month (February 2022) the median sales growth was 24.9%, Industry Insights added.
Respondents reported calendar-year-to-date sales growth of 24%. For the trailing 12 months ending March 2022, respondents reported strong sales growth of 23.7%.
Given the current high inflationary environment, the comparisons should be viewed with caution, Industry Insights said. The current trailing 12-month period contains sales from a period that has experienced significant price inflation and the comparison 12-month period contains nine months of 202 that had multiple weeks of closures or partial closures. Nonetheless, Industry Insights noted. It is encouraging that half the respondents reported trailing 12-month sales growth of between 17.8% and 33.1%.
Inventory jumped 35% for March 2022 vs. March 2021, and the median three-month days sales outstanding edged up from 41 days in February to 42 days in March.
“It was another strong month in terms of year-over-year sales performance, though these figures still should be viewed through a cautionary lens due to inflation—specifically inflated sales currently vs. low inflation sales last year at this time,” Industry Insights Senior Vice President Greg Manns said. Industrial PVF
Industrial PVF distribution firm respondents to the monthly sales report showed a median sales increase of 26.6% for February 2022 vs. February 2021. On a trailing-12-month basis, industrial PVF respondents reported a median sales increase of 36.6%. Inventory rose 32.3% for February 2022 vs. February 2021, while the three-months-average days sales outstanding increased slightly to 49.9 for industrial PVF respondents.
The advance “real” GDP figure for the first quarter 2022 reported a decline of -1.4%. Total wholesale sales for February grew 25.5% year-over-year, while inventories grew 19.9% vs. the prior year.
Housing permits and housing starts increased in March, while the unemployment rate for March dropped to 3.6% and initial claims for unemployment decreased in March, dropping below the 200,000 mark.
While the decline in GDP was a surprise to most economists, some of it is due to the definition of GDP, which indicates decreased government spending and increased net exports (typically a negative number). Additionally, some of the decline is simply due to timing — increased spending on inventories in Q4 would negatively impact Q1 GDP.
In summary, the other measures of the economy do not signal an immediate recession, but fiscal policy is aiming to cool the economy. The balancing act is slowing it enough to reverse the inflationary environment without pushing us into a prolonged recession.