DISTRIBUTION TRENDS: SLOW RECOVERY AHEAD FOR BUILDING MATERIALS DISTRIBUTORS
On his blog, Distribution Trends, Dr. Adam J. Fein predicts growth in 2010 for the construction industry, but he cautions this growth will be slow.
Distribution Trends Excerpt:
Building materials and construction wholesale distributors can look forward to a somewhat brighter 2010. Construction activity is showing signs of life but will remain depressed during the next 4 to 5 years as the excesses of the housing bubble get slowly worked out. I expect a gradually accelerating recovery and a return to the normal cyclical market dynamics that characterized the 1980s and 1990s. A detailed forecast for distribution appears below.
While growth will turn positive in early 2010, keep in mind that we are coming off a dramatically lower base level. Annualized revenues of building materials and construction wholesale distributors are now running at $98.4 billion compared to $145 billion in 2006, suggesting that substantial overcapacity remains in this sector.