Wholesalers had a strong year of growth in 2011 (an overall sales increase of 14.7%) for total sales of $4.8 trillion, according to the National Association of Wholesaler-Distributors’ (NAW) 2011 Annual Report. Durable Goods ended up 12.8% year over year, while Nondurable Goods posted a 16.3% increase. The businesses with access to cash did best, the report’s authors note.
They also predict a modest business cycle ahead.
“The rate-of-change for GDP (goods and services combined) and U.S. Industrial Production (manufacturing, mining, and electricity generation) have both ceased to move lower and are hinting at upward movement,” the report states. “That upward movement means a faster rate of recovery in the United States in 2012. We expect that segments of nonresidential construction will contribute positively in 2012 as well. On the downside, we anticipate that there will be no meaningful progress toward solving the indebtedness of the federal government.”
NAW offers the following forecasts for 2012:
• GDP and U.S. Industrial Production will rise throughout the year.
• Employment will rise throughout the year; unemployment will gradually decline but remain a problem.
• Business-to-business activity will remain strong throughout the year, albeit at a slower rate of rise than we enjoyed in 2011.
• Skilled labor will remain in short supply despite high unemployment.
• Commodity and labor prices will rise, reflecting inflationary pressures.
• The stock market will rise.
• Housing and nonresidential construction will post a modest recovery.
• Banks will lend more money than in 2011.
Given where we are in the business cycle, the report concludes, cash must be spent on:
• Making efficiency gains, whether they are training programs or capital items
• Hiring talented and skilled individuals
• Increasing the sales and marketing effort
• Developing competitive advantages
• Making customer satisfaction efforts
• Eliminating bottlenecks
• Introducing new items to the product lineup
• Expanding into a weak competitor’s backyard.