And Now For The Forecast

By the time you read this Wednesday, July 29, or later, we’ll have already presented our 2016 E&S market forecast at our annual President’s Preview meeting July 28. So what’s the bottom line?

We forecast another very good year for the market in 2016. We predict 4.6% nominal dollar growth, and because E&S price increases are likely to be quite restrained next year, real growth of 2.5% for the second year in a row. We revised our forecast for some individual product categories in 2015. We took smallwares and tabletop sales down a smidge and increased the numbers for the core cooking and refrigeration categories. But it didn’t change the total industries numbers: 4.8% nominal growth and 2.5% real growth.

The forecasts for both 2015 and 2016 are the best since the post-recessionary breakout year of 2011, when nominal growth was 4.7% and real growth 2.9%. And, in fact, the real growth rates for both years are the best since 2004, and, other than 2011, the best since we started forecasting the market again in 2000.

The E&S market and the base foodservice operator market are just hitting on all cylinders. Other than McDonald’s and a few other big QSRs, the chains are booming, including long-suffering full-service concepts. Fast-casual concepts are building units at a furious pace. State and local government funding for noncommercial segments is back to normal in most locales. Healthcare is booming as Americans age. Colleges and universities are replacing aging facilities. Manufacturers’ reps report record consultant activity across all segments except corrections. A six-month decline in wholesale food prices has boosted operators’ margins and cash flow across all segments.

All this will keep E&S dealers and their manufacturer partners busy for the next couple years. There just aren’t any dark clouds on the horizon that we can see. As we said a couple weeks ago, we do believe most of the pent-up demand for E&S has been wrung out of the market. But that’s not something we need worry about until 2017, when we do believe the market will begin to slow. But not dramatically. We don’t forecast nominal growth will sink below 4% and real growth below 2% until 2019. And that’s a long way off.

My thanks again to John Muldowney of Clarity Marketing for all his help and encouragement with the forecast. I couldn’t do it without him.

You can purchase the entire FER E&S Market Forecast, all eight PowerPoints, for $1,595. It covers general economic, operator, international, and materials price trends, historical E&S pricing data from AutoQuotes Inc., our rankings and analyses of the Top 100 Manufacturers and Top 100 Dealers, plus our E&S market forecast out through 2019. Just e-mail Robin Ashton at rashton@fermag.com for further information. Have a good rest of 2015 and a spectacular 2016.

Cheers,

Robin Ashton

Publisher