"Those numbers are right in line with what we've experienced this year, and I believe the gains are due to good corporate earnings and an extended bull market which boosts confidence and loosens the marketing purse," said Dan Taylor, president of BamBams (asi/38228). "Our booked orders heated up towards the middle of Q3 and our recognized revenue has been catching up, making Q4 look very strong."
Nearly six in 10 suppliers (57%) reported an increase in year-over-year sales in Q3. About 23% reported lower sales and 20% had no change in third-quarter revenues. Large supplier firms (more than $5 million in annual sales) had a stronger Q3 than smaller firms (less than $5 million), data shows. Large suppliers, on average, reported a third-quarter sales increase of 5.1% versus 1.3% for smaller companies.
Going forward, more than half (56%) of suppliers expect their 2014 full-year sales to be greater than their 2013 total revenues, buoyed by favorable fourth quarter numbers. "We expect about a 7% increase for Q4 year-over-year," said Alan Vaught, CEO of supplier firm Evans Manufacturing (asi/52840). "We have a stretch plan of 17% for next year, mostly from new product introduction."
The 4.7% quarterly supplier growth closely follows average Q3 gains among distributors. ASI data released last month showed distributors increased their third-quarter sales by 4.6%. Meanwhile, the Counselor Confidence Index, a measure of distributor health, was 112 in Q3 – identical to the six-month rolling average and a dozen points above the baseline that indicates industry growth.