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4Q 2013 Electrical Distribution Survey Results Are In

The tED magazine/Baird Research survey shows some encouraging news for the first quarter of 2014.

Baird Research interviewed more than 50 distributors and manufacturers with a combined annual revenue of approximately $10 billion.

Revenue for Electrical came in above the annual survey average for the 4th quarter of 2013 with a 4.4% increase.  Pricing remained flat to slightly up, due in large part to steady copper pricing.

But the biggest news is the revenue forecast for the first quarter of 2014 and the forecast for the entire year.  Electrical is expecting a 4.5% revenue growth in the first quarter of 2014, and a 6.7% increase for the year.

One of the key concerns for 2014 is in construction trends.  Some of the responses Baird Research received related to non-residential construction included, “Commercial construction is improving slightly”, “Non-residential construction is still soft”, and “Our industrial business picked up quite a bit in 4Q”.

But there is some positive news for copper pricing, where the people surveyed are finding copper will either have a small increase or remain flat in 2014.

The distributors and manufacturers interviewed during the fourth quarter of 2014 also have concerns about inventory by telling the researchers “Inventory increased but needs to trend down”, “Slow moving inventory was scrutinized resulting in returns or scrapping”, “Still focused on reducing inventories to align with demand profile”, and “We will strategically reduce inventories as long as supplier lead times are responsible.”

A big concern can be in the e-commerce area.  When asked if their company had an e-commerce offering on their website, 1 in 3 said they still do not.  On top of that, nearly 8 in 10 respondents say they are getting less than 5% of their revenue from e-commerce.

Despite these results, many manufacturers and distributors know this is an important part of their competitive future by responding, “We have an off the shelf product only because we are starting to get inquiries.  Sooner or later we’re going to have to pull the trigger”, and “We are looking at e-commerce but do see it in full effect in 2014”.  Even though they haven’t launched an e-commerce effort, they do see a threat to the supply chain from Amazon Supply by telling researchers they are “keeping an wary eye on Amazon”, and that “Amazon’s build-out physical infrastructure is a bit of a concern”.

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