If you are into baseball and its fascinating inner workings as I am (By the way, how about the Nationals?), I would recommend checking out two recent books: “The MVP Machine” by Ben Lindbergh and Travis Sawchik, and “Astroball” by Ben Reiter.
Both books dive into how big data is shaping the paths of Major League Baseball teams. The Linbergh and Sawchik book is particularly strong.
I have always been a firm believer that numbers tend to tell the truth. That crappy 71 I got on a geometry test in 10th grade? Likely a product of not studying enough and not asking for extra help on the subject. The weight I’ve gained in recent years? Definitely a product of bad eating habits and not enough exercise. The triple-digit strikeout total my daughter put up this year as a softball pitcher? A product of hard work on a journey to perfect her craft. Numbers don’t lie.
As we put a bow on 2019, there is plenty of data out there regarding where our industry might be headed in 2020 and a little beyond that.
In a nutshell, it looks to be a mixed bag.
In BNP Media’s Plumbing Group, which includes pme, two distributor-focused trade associations (ASA and HARDI) paint a brighter picture. ASA members sales were up 6.4% year-over-year in the third quarter, while year-to-date sales through September were up 4.8% and up 6% for the trailing 12 months.
ASA’s sales forecast continues to be bullish, but just as with most economic outlooks, it notes, there is a slight recession risk on the horizon.
As of this writing, ASA Business Intelligence Analyst Ayesha Salman cautioned to keep an eye on the recently passed China consumer product tariff deadline. “Purchasing managers may try to get ahead of this deadline (Dec. 1), which could create a surge in product demand,” she said. “It may also lead to an overstock of inventory.”
HARDI, whose members distribute HVAC products, reported average sales performance by its members increased 11.9% in September, while average annualized sales growth for the 12 months through September was at 7.4%.
“The economy continues to do very well,” HARDI Market Research & Benchmarking Analyst Brian Loftus noted. “The annual sales growth eas-ing back into more normal high single-digit territory reflects the difficult comparison against the accommodating weather pattern last year, and the industry PPI easing from the 6.2% peak annual rate of increase achieved in April to 3.8% through September.”
However, on the PVF side, one of the world’s largest distributors in that space reported a 12% drop in sales when comparing the first three quarters of 2018 with 2019, with sales decreasing across all segments and end markets.
Another source of data I like to keep my eyes on is produced by Dodge Data Analytics, which recently released its 2020 Dodge Construction Out-look. That report predicts total U.S. construction starts will slip to $776 billion in 2020, a decline of 4% from the 2019 estimated level of activity. That number follows a 1% decline in 2019 after a 3% increase in 2018.
“The recovery in construction starts that began during 2019 in the aftermath of the Great Recession is coming to an end,” said Richard Branch, chief economist for Dodge Data & Analytics. “Easing economic growth driven by mounting trade tensions and lack of skilled labor will lead to a broad-based, but orderly pullback in construction starts in 2020.”
So what do all these numbers mean? To use some baseball math, if I had to guess about 2020, we’re probably talking about a .268 batting average, good, not great, but definitely not Mario Mendoza, Rob Deer or Chris Davis bad.
Enjoy your holiday season!