MAFSI Barometer Charts E&S Market’s Continuing Improvement

The Business Barometer maintained by the Manufacturers’ Agents Association for the Foodservice Industry improved again in the third quarter, posting a modest 1.5% decline versus the third quarter 2009. While the index recorded contracting sales for the 11^th consecutive quarter, the number was the third consecutive quarter of improvement. The Barometer bottomed out in the second and fourth quarters last year at -12.8%. Sales were off 5.3% and 3.3% in the first and second quarters this year respectively. During last year’s third quarter, sales fell 11.5%.

As Michael Posternak, principal at PBAC & Associates, a New York-based rep firm, said in his commentary accompanying the release of the numbers, the Barometer “clearly shows a steep u-shaped (almost v-shaped) cycle has occurred over the past three years. If this trend continues, we will break into positive ground in the next quarter or two.”

The beleaguered West continued to lag the other regions, with sales off 6.1%. The South rebounded to a 1.6% gain, its first in more than two years. Canada also showed growth with a 0.3% gain. Sales in the Midwest fell 2.1% while in the Northeast, reps reported a slight 0.3% decline.

Equipment and furniture sales continued to track negatively with declines of 2.1% and 0.6% respectively. Supplies and tabletop posted very moderate gains of 0.2% and 0.1%.

The reps surveyed forecast an overall 2.1% decline in the fourth quarter, driven lower by forecasts of another tough quarter in the West. Reps there forecast sales will be off 7.1%.

Posternak noted that the ratio of reps quotation activity also rose, with 27% quoting more versus 22% quoting less and 50% seeing quotation requests even. It was the first time the more-to-less ratio swung to the positive in more than two years.

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