Sales Upturn for Electrical Distributors in Third Quarter 2005

12/12/2005


Electrical distributors’ expectations for improving sales continued during the third quarter of 2005, according to the National Assn. of Electrical Distributors’ (NAED) recent Quarterly Sales Change Expectation Survey (QSCE).

Out of those surveyed, 89.9% estimate a rise in sales for the third quarter (Q3) which ended September 30, compared with 81.6% who anticipated increased sales following the second quarter. However, fewer distributors, 77.4%, predict sales increases during the colder months of the fourth quarter (Q4), which ends Dec. 31.

Third Quarter Optimism Highest in Survey History

At nearly 90%, the third quarter’s positive sales expectations proved to be the most optimistic for the “quarter just ended” since NAED’s QSCE survey started in 2003. Nearly half of the respondents (47.5%) expect increases of 10% or more in sales for Q3. Yet the picture is not rosy for all; 7.8% of respondents anticipate lower sales for the quarter and 1.8% expected flat sales.

Fourth Quarter Prediction: Cautious, but Positive

Distributors are expecting the upswing to continue, but perhaps in a less extreme manner. For the fourth quarter of 2005, nearly 80% (77.4%) forecast positive sales growth. Respondents expect a 10% or higher growth rate of 28.6%. Other top growth categories were: 5% to 5.9% (12%) and 4% to 4.9% (10.6%). Flat sales are foreseen by 12% and 8.8% forecast a sales decline.

Midwest, South Share Positive Outlook

The Midwest (91.9%) and the South (90.3%) displayed the most optimistic outlook for Q3, while the West (89.6%) and Northeast0%), and West (43.8%).

The Northeast (75.8%) and South (74.2%) trail slightly behind the Midwest (77.0%) and West (83.3%) with lower expectations for Q4 sales growth.

Large Companies Lead Q4 Quarter Forecasts

Overall, companies of all sizes experienced positive growth of over 80% for the third quarter. Companies with

Again, distributors with 50 or more employees (85.4%) lead fourth quarter sales increase forecasts are distributors with 50 or more employees (85.4%), followed by 10 -19 employees (85.2%) and 30 - 49 employees (81.3%).

The smallest companies with one to four employees

Participation Encouraged

The survey was distributed in early October and e-mailed to approximately 3,800 distributor locations. The questionnaire is administered quarterly and focuses on sales expectations for the previous and upcoming quarters.

Past reports are available under the "industry research" section of www.naed.org .





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