This is the first month in more than two years that respondents have reported a median year-over-year decline in sales. On a month-to-month basis (April vs. March 2023), respondents reported a greater decrease in sales of nearly -9%.

Industry Insights, which produces the ASA monthly sales report for ASA distributor members, noted that on a trailing-12-month basis, it remains encouraging that half of the respondents reported TTM sales growth between 6% to 21%.

Inventory rose 4% for April 2023 vs. April 2022. The median three-months average days sales outstanding increased to nearly 41 days in April.

“Year-over-year sales declined -1.8% for April, representing the first month since January 2021 that respondents reported a decline in sales. Year-to-date and trailing- twelve-month sales growth remain in positive growth territory. Industry Insights Senior Vice President Greg Manns said. “As we begin the second quarter, overall expense management is becoming increasingly critical in an environment of increased margin deterioration. For the second consecutive month, nearly half the respondents reported a decrease in gross margin and profit before taxes YTD vs. a year ago."

ECONOMIC INDICATORS

The "Real" GDP growth for the 4th quarter 2022 was revised down again from 2.7% to 2.6%. Total wholesale sales for January grew 1.3% year over year, while inventories grew 12% vs. the prior year.

The Department of Commerce recently began reporting "Real" wholesale sales to provide a more accurate picture of inflation-adjusted growth. "Real" wholesale sales growth was essentially flat for January (Data has not yet been reported for February). Housing permits and housing starts reported a surprising increase in February, largely due to an increase in multifamily housing, but both dropped in March with permits dropping significantly. Both starts and permits remain well below their 2022 levels. The unemployment rate dropped to 3.5% in March despite initial claims for unemployment increasing to over 238,000.

WHAT ASA DISTRIBUTOR MEMBERS ARE SAYING:

• Some comments from ASA member distributors that participated in the April monthly sales report:
• “Sales remain strong, but margins are tightening. Price reductions by suppliers in certain product categories are having a negative effect on existing inventory.”
• “Service and repair contractors demand is easing up a little. They have been very busy for years now. Starting to soften.”
• “Steady decreases have been the norm. There seems to be fewer housing starts and the remodel market has slowed as well. The typical sales increase during summer months is expected.”