Respondents to ASA’s monthly sales report reported a median sales increase of 1.7% for March 2023 vs. 2022. This represents the lowest this figure has been since February 2021. Year-to-date sales through March 2023 were up 8.9% vs. 2022.
Industry Insights, which produces the ASA monthly sales report for ASA distributor members, says that while inflationary pressures are beginning to slowly soften, year-over-year comparisons should continue to be viewed with caution. Though year-over-year sales growth was a modest 1.7%, respondents reported an increase in sales of 15% on a month-to-month basis for March vs. February.
It is encouraging, Industry Insights notes, that half the respondents reported TTM sales growth between 8% to 22%. Inventory rose 7% for March 2023 vs. March 2022.
“Though year-over-year sales growth was a modest 1.7% for March, respondents reported an increase in sales of 15% on a month-to-month basis for March vs. February.” Industry Insights Senior Vice President Greg Manns said. “The sales increase of 1.7% for March 2023 vs. 2022 is the lowest this figure has been since February 2021. Additionally, 25% of respondents reported a decline in sales for March 2023 vs. 2022. As the first quarter of 2023 ends, we are seeing increased margin deterioration with nearly half of the respondents reporting a decrease in gross margin and profit before taxes YTD vs. a year ago."
Economic indicators
The "real" GDP growth for the fourth quarter 2022 was revised down again from 2.7% to 2.6%. Total wholesale sales for January grew 1.3% year-over-year, while inventories grew 12% vs. the prior year.
The Department of Commerce recently started reporting "real" wholesale sales to provide a more accurate picture of inflation adjusted growth. "Real" wholesale sales growth was essentially flat for January (Data has not yet been reported for February).
Housing permits and housing starts reported a surprising increase in February, largely due to an increase in multifamily housing, but both dropped in March with permits dropping significantly. Both starts and permits remain well below their 2022 levels. The unemployment rate dropped to 3.5% in March despite initial claims for unemployment increasing to more than 238,000.
What ASA distributor members are saying:
Some comments from ASA member distributors that participated in the monthly sales report:
- “Business is strong but moderating... April has particularly gotten off to a sluggish start.”
- “Many of our customers are seeing business slow, especially in new home construction.”
To access the full ASA monthly sales report and to access archived reports, log into your MyASA account at www.asa.net/myasa.
