STAFDA Distributors Post 6.2% Sales Growth In Q2

STAFDA distributors posted a solid second quarter of year-over-year growth, led by the U.S. South Central, Rocky Mountain, Northwest and Pacific regions. See the numbers behind STAFDA members' Q2, as well as their outlook for Q3.

Id 32637 Stafd Aa

ELM GROVE, WI — Participating Specialty Tools & Fasteners Distributors Association (STAFDA) distributors in the Q2 2017 Trend Report had a solid second quarter, posting a 6.2 percent sales gain year-over-year.

According to Dodge Data & Analytics Report, for the first half of 2017, total construction starts on an unadjusted basis were $442.7 billion, down 4 percent from the same period a year ago. Dodge again points the finger at manufacturing plant and electric utility/gas plant categories for pulling the percentage down. If those two sectors were excluded, total construction starts for the first half of 2017 would be up 1 percent relative to last year.

"Since last year, total construction starts have shown an up-and-down pattern on a quarterly basis, including a 6 percent decline in Q4 2016 followed by a 7 percent increase in Q1 2017, and now a 10 percent decline in Q2," stated Dodge chief economist Robert Murray. "The 11-12 percent yearly increases for total construction starts from 2012-2015 were followed by a 4 percent gain in 2016. Several factors suggest 2017 will see modest growth. Attributing factors include low commercial vacancy rates, as well as more construction funding coming from state and local bond measures passed in recent years. Any impact from a new federal infrastructure program — should one get passed this year — would benefit construction in 2018-2019."

STAFDA distributors — averaging $20.6 million in annual sales, reported:

Region Q2 '17 Sales to Q2 '16 A/R 6/30/17 to 6/30/16 Avg. A/R Days
Northeast -3.9% -7.6% 34
Mid-Atlantic 2.7% 0.0% 31
Southeast 4.9% -1.1% 25
South Central 14.4% -11.0% 45
Midwest -6.0% -14.6% 51
North Central -2.0% 5.8% 35
Rocky Mountain 14.9% 25.3% 33
Northwest 23.0% 20.0% 41
Pacific 9.4% 22.0% 46
Canada 0.6% -16.5% 40
Overall Avg. 6.2% 2.2% 38

The 4 percent decline in total construction for the first half of 2017 is the result of reduced activity for nonbuilding construction, residential building being flat and nonresidential building seeing moderate growth. Nonbuilding construction year-to-date fell 22 percent, with electric utilities/gas plants down 60 percent and public works off 4 percent. The "no change" for residential building YTD was the result of an 8 percent increase in single family housing offsetting an 18 percent slide in multi-family housing. Nonresidential construction advanced 6 percent YTD with institutional building up 11 percent while commercial held steady combined with a 13 percent increase for manufacturing building, reversing a sharp decrease from 2015-2016.

By geography, total construction starts for the first six months of 2017 saw this pattern: South Atlantic +11 percent; West unchanged; Northeast -5 percent; South Central -13 percent; and Midwest -16 percent.

STAFDA distributors foresee Q3 shaping up like this:

Region Q3 '17 to Q2 '17 Sales Q3 '17 to Q3 '16
Northeast -5.5% 2.5%
Mid-Atlantic 2.7% 7.5%
Southeast 2.4% 6.9%
South Central 1.1% 5.0%
Midwest 4.0% -0.4%
North Central 5.7% 14.7%
Rocky Mountain 4.9% 7.3%
Northwest 3.7% 11.7%
Pacific 9.6% 15.0%
Canada -15.0% 8.0%
Overall Average 1.4% 7.8%

 

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