Respondents to ASA’s monthly sales report reported a median sales increase of 26% for May 2022 vs. May 2021. This comes on the heels of an 18% bump when comparing April 2022 vs. April 2021 totals.

Industry Insights, which produces the ASA monthly sales report for ASA distributor members, noted the March 2022 results reflect another month of robust performance compared to the same month a year ago, but when compared to the previous month (April 2022), the median sales growth was a more modest 3.4% sales growth, which was a strong improvement from the minus-5% dip when looking at April 2022 vs. March 2022 numbers.

Respondents reported calendar-year-to-date sales growth of 23%, flat compared to the last report. For the trailing 12 months ending May 2022, respondents reported strong sales growth of 20%, again down from the April 22% and the March 23.7%.

Given the current high inflationary environment, the comparisons should be viewed with caution, Industry Insights said. Additionally, the current trailing 12-month period contains sales from a period that has experienced significant price inflation, and the comparison 12-month period contains seven months of 2020 that had multiple weeks of closures or partial closures, Industry Insights explained.

Nonetheless, it is encouraging that half the respondents to the monthly sales report survey reported trailing 12-month sales growth between 17.1% to 28.7% — slight improvements from the April report’s range of 16.6% and 28%, Industry Insights added.

Inventory jumped 36% for May 2022 vs. May 2021. The median three-month average days sales outstanding remained at 41 days in May, still down a day from the March total.
“It was another strong month in terms of year-over-year sales performance, though, these figures still should be viewed through a cautionary lens due to inflation, i.e. inflated sales currently vs. low inflation sales last year at this time,” reiterated Greg Manns, senior vice president at Industry Insights.

Industrial PVF

Industrial PVF distribution firm respondents to the monthly sales report showed a median sales increase of 35.3% for May 2022 vs. May 2021 (April comps were 30.4%). On a trailing-12-month basis, industrial PVF respondents reported a median sales increase of 39.9%, well up from April numbers. Inventory rose to 30.7% for May 2022 vs. May 2021 (28.3% for April 2022 vs. April 2021), while the three-months-average days sales outstanding decreased to 45.1 for industrial PVF respondents (45.9 for April).

Economic indicators

The final “real” GDP figure for the first quarter of 2022 was revised down slightly from a decline of -1.5% to a decline of -1.6%. Total wholesale sales for March grew 20.9% year-over-year, while inventories grew 24% vs. the prior year. Housing permits and housing starts decreased in May. Permits still remain slightly higher than they were in May 2021, but the housing starts are below their May 2021 mark. The unemployment rate for May remained at 3.6%, and initial claims for unemployment jumped back over the 200,000 mark in May.

What ASA distributor members are saying:

Some comments from ASA member distributors that participated in the monthly sales report:

• “Steady increase in volume, but margins will suffer as we deal with inflation.”
• “We know there are storm clouds forming, but we have not seen any of that play through in our results. May was a record sales and profit month. We will keep our eye on hiring, but we also know that our markets remain strong, and we would expect that to continue through the remainder of the year.”