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 HDS clients, like those in the industrial sector, 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 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). 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."