STRAINS ON THE WAY UP

If you’ve seen the recent news items on our annual equipment and supplies industry forecast, you know the recovery of the market is fully underway. We’re forecasting current dollar growth of 4.4% this year and 5% next. The hard numbers from MAFSI and the public E&S companies for the second quarter continue the positive streak.

But this doesn’t mean things are easy out there. We’ve just spent a week in Ohio and Kentucky seeing manufacturers and dealers. And while nearly everyone was optimistic, it was also clear that economic uncertainties and the realities of the market have many on edge.

Several manufacturers told us the market grows by fits and starts—a strong month followed by a soft one. Certain segments remain negative, especially on the publicly funded spec side. Several suppliers told us the schools market was off as much as 10% this summer. This follows two summers of growth thanks in part to a federal stimulus infusion for equipment of nearly $150 million.

And while the chains have definitely been the first movers in the upturn, the downturn blew up many chains’ E&S and facilities functions. People have moved, and departments have re-staffed. The operator specialists are under great pressure to get things done as cheaply as possible. “How does a new purchasing person prove their worth?” one chain-oriented dealer asked us. “By squeezing some juice from their suppliers,” we answered.

So while things are certainly better than a couple years ago, there is plenty of strain in the system. Of course, no one ever said this business of equipping foodservice facilities was a walk in the park. Still, do good work and try to have some fun. Enjoy the last few weeks of the summer.

Cheers,

 

Robin Ashton

Publisher

rashton(at)fermag.com

 

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