While Confidence Is Growing, Business Still Needs a Boost
A recent survey conducted by pme’s parent company, BNP Media, shows confidence is increasing among distributors who sell plumbing and heating products and industrial pipe, valves and fittings. Two-thirds of respondents say their business will grow in the next three years – with 16% saying their business will grow significantly.
Even better news for <pme readers is 81% of respondents believe the growth will come from the commercial/industrial sector. While 52% say residential business will be the second biggest area of growth, 45% say work from public-sector jobs will increase and 22% cite renewable energy as another growth market.
BNP Media’s Market Research Division developed the survey questions with the American Supply Association and Supply House Times, which is pme’s sister title and ASA’s official publication. We sent the survey to ASA members in August in advance of their annual convention last month in Las Vegas.
Most of the distributors I spoke with at the meeting were upbeat and supported our research. That being said, they expect their business to remain flat or show a small increase in the short term.
Two speakers at the convention agreed in separate presentations that identifying a recovery has been difficult with unemployment exceeding 9% and economic growth stuck at 1%. They also share the view that companies have to act if they are to make money in the still struggling economy.
Finance writer Gene Marks listed four trends that could help wholesalers become more profitable. These could benefit your business as well:
Follow the money. Companies should go after growing industries. These include education, health care, technology, infrastructure and alternative energy.
Right size your company. This does not have to mean layoffs. More companies are outsourcing operations, such as their phone service, to specialists. They’re also allowing more employees to work from home, which takes up less space and could lower rent.
Consider the cloud. Cloud computing allows employees to do what they need to do wherever they want to do it. It can operate off a laptop, smartphone or iPad.
Have a few favorite metrics. Business people can get an idea of where the economy is going by regularly following metrics as diverse as the Baltic Dry Index (www.balticexchange.com), Consumer Confidence Index (www.conference-board.org), Divorce Index and Men’s Underwear Index. Some like to track auto sales or the price of steel and copper.
In his presentation, economist Lowell Catlett said the U.S. economy has strengths that often go unmentioned. Baby boomers, for example, make 80% more income than their parents did.
In today’s economy, companies have to be ready to make changes, Catlett noted.
“Those prepared to make changes the fastest will survive,” he said. “Will you always be right? No! Remember no general ever goes into battle without a plan. And no plan ever survives a battle.”
So, while confidence is increasing that business will get better, you’ll have to act to make sure your company is positioned for success.