Exclusive data released in May by ASI shows that distributor sales grew by 6.4% in Q1 of 2014, the highest quarterly gain since early 2012. The positive sentiment is underscored by the Counselor Confidence Index (CCI), an indicator designed to measure distributor health. The CCI hit 114 for the first quarter – a record number.
“The first quarter has been outrageous for us,” said Howard Schwartz, founder and CEO of HDS Marketing (asi/216807), which recorded nearly 30% growth for the quarter. “Our salespeople have hit the ground running.”
Certain industries like HDS’ industrial clients are spending a little bit more, but Schwartz also sees the strong quarter as an extension of his company’s continued growth, including 10%-15% last year.
More than half (55%) of distributors reported a year-over-year increase in sales in Q1, the highest number of growing distributor firms in nearly two years. Large distributors – companies with more than $1 million in annual sales – fared the best, recording 7.4% growth for the quarter, on average. Mid-sized distributors ($250,000 to $1 million in revenues) averaged 5.4% growth. The smallest distributor firms (less than $250,000) reported an average sales increase of 2.4%.
Overall, distributors are also bullish about their prospects for the rest of the year. Two-thirds of survey respondents expect an improvement in sales over 2013. Optimism is strongest among large distributors, with nearly three-quarters predicting an increase.
The confidence comes despite a few lingering concerns about the U.S. economy. “We see a fairly steady but slow growth for the remainder of the year,” said Gregg Emmer, vice president and chief marketing officer for Kaeser & Blair (asi/238600).
Business at the Top 40 firm is up over last year by about 5%, though Emmer notes that the results of this year’s midterm elections “could lead to a much stronger finish to the year.”