Respondents to ASA’s monthly sales reported a median sales increase of 18% for January 2023 vs. 2022. This reverses a four-month trend of slowing year-over-year rates of growth.
Industry Insights, which produces the ASA monthly sales report for ASA distributor members, says that while inflationary pressures are beginning to slowly soften, the year-over-year comparisons should continue to be viewed with caution. For instance, on a month-to-month basis, respondents reported a more modest increase in sales of 3% for January 2023 vs. December 2022.
It is encouraging that half of the respondents reported trailing-12-month sales growth between 10.9% to 27.8%.Inventory rose 10% for January 2023 vs. January 2022. The median three-months average days sales outstanding edged up to nearly 41 days in January.
“January’s strong sales growth of 18% reversed a four-month trend of slowing year-over-year rates of growth.” Industry Insights Senior Vice President Greg Manns said. “It's a solid start to 2023, though stronger than expected jobs reports to start the year have some concerned of continued tightening with more aggressive rate increases by the Fed. Inflationary pressures continue to squeeze gross margins. Over 46% reported a decline in gross margin compared to last year vs. only 45% who reported an increase.”
ECONOMIC INDICATORS
The "Real" GDP growth for the fourth quarter 2022 was reported at 2.9%. Total wholesale sales for December grew 7% year-over-year, while inventories grew 18% vs. the prior year. The Department of Commerce recently began reporting "Real" wholesale sales to provide a more accurate picture of inflation-adjusted growth. "Real" wholesale sales growth was only 1.9% for December. Housing permits essentially were flat in January and starts declined again, with both remaining well below their 2022 levels. The unemployment rate dropped to 3.4% in January and initial claims for unemployment dropped below 200,000.
WHAT ASA DISTRIBUTOR MEMBERS ARE SAYING:
Some comments from ASA member distributors that participated in the monthly sales report:
- “Best year in our 100-plus-year history!!”
- “January was a strong month with top-line sales growing significantly over Jan 2022. Time will tell if this is a trend or if this was purely a result of comping against a slow month in 2022 because of bad weather. It seems like it is staying relatively robust. If we could get the national news to stop shouting out doom and gloom, I am positive that the sentiment would rise.”
To access the full ASA monthly sales report and to access archived reports, click here.
