Posted June 14, 2021

NetPlus Alliance members optimistic about 2021

NetPlus Alliance distributor members are optimistic about 2021 sales growth amid the COVID-19 recovery, according to the latest NetPlus Alliance quarterly Industry Outlook.

The NetPlus Alliance Industry Outlook is a quarterly report based on a survey of NetPlus distributor members that tracks business results and trends in the industrial and contractor supply markets. The survey was completed in May 2021 and the Outlook was based on first-quarter 2021 sales results.

The report found that 35 percent of distributor members reported a significant increase (8 percent or more) and 25 percent reported moderate gains (3-7 percent) in 2021 first-quarter sales compared with 2020. Reasons for the increase included the ongoing COVID-19 recovery; pent-up demand; new construction starts; and increase in oil and gas activity.

Purchases through NetPlus Alliance suppliers in the first quarter 2021 were up more than 13 percent over the same period in 2020, and 25 percent better than the first quarter of 2019.

Forty-six percent of distributors forecast a significant increase in sales for the full year of 2021 compared with 2020 and another 35 percent expect moderate growth due to the return of manufacturing, new business prospects, and new project starts. That said, 22 percent of distributors remained concerned about supply disruptions, higher cost of goods, customer caution, federal uncertainty, and a potential downturn.

“We are having a very nice rebound post-pandemic as the COVID crisis winds down, with over 60 percent of our distributors seeing sales increases compared with first-quarter 2020 sales,” said Dan Judge, NetPlus Alliance founder and chairman. “That said, supply chain challenges and labor shortages remain major issues for distributors.”

Nearly 91 percent of distributors responding to the survey reported extended lead times and unpredictable supply, making on-time customer deliveries difficult. What’s more, over 51 percent of members reported higher inventory holdings due to supply shortages. Distributor members also expressed concern over declining work force participation, making it difficult to fill open positions required to meet customer demand.