Returning to 'normal'
More than a year after the start of the coronavirus pandemic, the economy continues to gain momentum. Over the past 12 months, the much touted Institute for Supply Management purchasing managers’ index (PMI), a bellwether of the state of the manufacturing sector, has averaged 55.3 percent, placing it firmly in expansion territory. In fact, the PMI hasn’t fallen below the 50 percent level since May 2020.
Another sign of good news comes from the National Association of Manufacturers, which recently released its first Manufacturers’ Outlook Survey of 2021. That survey showed that
optimism among manufacturers is at the highest level in two years, at 88 percent, compared to 74 percent in the Q4 2020 survey.
The construction sector may see slower growth than manufacturing, however, as rapidly escalating materials prices will likely tamp down momentum.
The Dodge Momentum Index issued by Dodge Data & Analytics, moved to 151.4 in March from a February reading of 148.8. The index is a monthly measure of nonresidential building projects in planning, which have been shown to lead construction spending. According to the March data, the Index hit its highest level since the summer of 2018, and may signify that the public side of building construction is beginning to stabilize following the COVID-19 led pressure on state and local budgets and suggests a pickup in construction starts.
All of these reports suggest that hope is building for a strong economy recovery as more Americans become vaccinated. Armed with this information, distributors need to make sure that their companies are poised to take advantage of the coming recovery.
You’ve likely been making adjustments to staffing, inventory, technology and other aspects of your business during the pandemic to get you through uncertain times. Now is the time to revaluate those decisions to ensure that you’re able to quickly take advantage of a growing economy.
Rich Vurva
Editor/Publisher
Twitter: @IndSupplyMag
This article originally appeared in the May/June 2021 issue of Industrial Supply magazine. Copyright 2021, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
