By Erin Prinster, NAED Business Intelligence Analyst
The fourth quarter brought additional rate hikes as the Fed continued to stand firm in its aim to tame inflation. While there are some signs of inflation slowing, material and labor costs continue to put a strain on profit margins throughout the industry. Additionally, the availability of products/supplies continues to be a primary concern for businesses. While we are beginning to see some glimpses of improvements, it is anticipated that supply chain issues, a tight labor market, and inflationary pressures will continue to be present into the 1st quarter, 2023.
NAED’s Expected Sales Growth Index for Q4 rebounded to 3.51, up from 3.40 reported in the 3rd quarter, 2022. The typical respondent expects sales to growth between 4% and 10% over the next twelve months.
Of those expecting growth in capital spend over the next 12 months, 9% believe there will be significant increases (more than 10%) and 31% expect moderate increases (between 4% and 10%).
Derived from a quarterly survey—State of Your Industry—that NAED has been conducting for one year, NAED’s Expected Sales Growth Index gauges leaders’ sales revenue expectations for the next 12 months. The survey also asks about capital spend, technology investment, sales backlog, inventory backlog, and much more, including current concerns and new this year is “number of units sold”.
Results for the latest survey indicate that momentum comes with some concerns as they are also occupied with the availability of products/supplies, finding qualified employees, and wage inflation.
Building and construction data saw all regions growing on both a quarter-over-quarter and year-over-year basis according to NAED’s Construction Index for Q4 (which helps to predict which Metropolitan Statistical Areas (MSAs) are poised for growth). This was early in the Federal Reserve’s rate hike cycle, and we expect some of these growth rates to decline in the coming quarters.
NAED’s full Economic and Industry Sector Outlook, which includes NAED’s exclusive Construction Index, is scheduled to be released on Friday, January 27th, 2023, and is free to all distributor members courtesy of Schneider Electric and Hubbell, Inc.
To find out more about the survey, contact NAED’s Business Intelligence Analyst, Erin Prinster at eprinster@naed.org. For more information on how to download or purchase NAED’s Economic and Industry Sector Outlook click here or contact NAED’s Member Engagement Team.
Tagged with Economic Outlook, NAED