Just under half of America's LBM dealers responding to a ProSales survey predict sales will increase next year and another quarter think they'll hold steady, poll results released today show.
(Click here to download summary of survey results.)
Those 2010 expectations follow a year in which roughly 60% of the respondents said sales were down at least 20%, close to 43% said profit margins had shrunk, and just over half expected their location would post an operating loss.
"This year will definitely be a loser," one dealer commented. "We have made enough adjustments and are predicting a small amount of growth for next year which should amount to a small profit." Added another: "Most of the losses we had came early in 2009, but we have stabilized the company by cutting expenses across the board. On slightly higher sales, 2010 should be marginally profitable."
ProSales' online survey, launched Nov. 18 and concluded Dec. 1, drew 308 responses from shortline and two-step building material dealers from across the country. Nearly 90% of the operations were pro-oriented, and yards of all sizes all were represented.
The traumas that dealers experienced this year were exemplified by the actions they took. More than 60% said they fired some operations staffers, 46% fired some sales staff, and 32% left jobs unfilled after staffers left. Nearly 37% of respondents said their yard furloughed workers (i.e., required staff to take unpaid time off), and 34% reduced store hours. More than 70% said they ended 2009 with fewer employees than they had at the start of the year.
Some of those jobs might return in 2010, but the record is mixed. Nearly half the respondents said they will hire staff to meet increased demand and 30% plan to recruit people even if they don't hire new staff. On the other hand, 22% of the respondents said they expect to fire people if demand drops or even stays at current levels, and 32% will continue to reduce staff by not replacing people who leave.
Respondents' 2009 estimates suggest there were vast differences in dealers' sales results. Roughly 5% of dealers said sales fell at least 50%, another 5% said they fell 40% to 49%, and 17% reported a decline of 30% to 39%. The biggest group of respondents-33%--said sales declined 20% to 29%, while another 20% said sales shrank by 10% to 19%, and 9% reported sales slipped 1% to 9%.
Only 5% said sales were "roughly equal" with 2008. On the plus side, just 4% reported an increase of 1% to 9%, and 2.7% said their sales jumped by 10% to 19%. Nobody reported anything bigger.
In contrast, for 2010, only about 4% of dealers expect sales to drop by at least 20% and 22% expect sales to be down by 1% to 19%. Just over 27% expect sales in 2010 will be "roughly equal" with 2009, 30% look to growth of 1% to 9%, 14.2% expect sales to climb 10% to 19%, and 2% expect an increase of at least 20%.
"After nearly three years of getting our butts whipped, it looks like slow improvement is on the horizon," one dealer wrote.
Bigger dealers tended to be slightly less optimistic than smaller ones. Dealers in western states tended to be more pessimistic about growth in 2010 than their eastern cousins.