Omni’s business conditions survey shows strong commercial sales ahead but wait-and-see for new construction.

Omni’s member survey regarding business conditions found that 87% expect their commercial business to increase or at least stay the same for the first six months of this year, while 8% project a decrease. Commercial business was up last year according to 49% of respondents; 29% said it was flat. Only 7% said they saw a decrease.

The picture is quite different on the new construction side. Among the survey respondents, 22% expect an increase for the first half of 2007; 42% expect things to stay the same; and 33% predict a decrease. Last year new construction business increased, according to 14% of those surveyed; 20% said it was flat; and 50% reported a decrease.

Omni shared these survey results at its 2007 spring meeting held at JW Marriott Grande Lakes Resort in Orlando.

Inventory levels are one way of measuring the temperament of the market. For the first six months of 2007, 26% said they plan to decrease inventories, 55% will keep them the same and only 18% will increase inventories. Meanwhile, 38% of those re-sponding said they increased inventories last year; 32% kept inventories the same; 27% decreased their inventories.

“They are hedging their bets a bit,” said Robert D. Hoff, president of the member-owned group purchasing and marketing organization. “There is a low level of confi-dence in the market. As we get to the end of the first half, around May or June, we’ll start seeing the picture for the year as a whole.”

In terms of total sales, 38% project an increase for the first half of 2007; 44% anticipate flat sales; and 18% expect sales to dip. Among those surveyed, 56% said sales increased last year, 11% had flat sales, and 33% saw sales decrease.

While 33% of those surveyed reported a decrease in sales for last year, the average percentage of decrease was only 9%, Hoff pointed out.

“Housing starts will come back, but at a slower pace than some of the increases we have been seeing,” he said. “We have to watch the market carefully. We are all basi-cally holding our own and waiting for the next wave.”

A growing number of wholesalers are becoming interested in the remodeling market, Hoff noted. Also, about 90% of Omni’s wholesaler members are in the showroom business.

“The margins are there,” Hoff said. “They need products that are unique and not car-ried by competitors - products they can sell.”

To address the growing interest in showrooms, Omni provided two workshops on showroom selling and merchandising trends, presented by Jason DeBruer, training specialist at Basco, and Carolyn Peters, national sales and marketing manager, Masco Design Solutions. Coverage of these will appear in the April issue OF SUPPLY HOUSE TIMES.