行业焦点：2022年第二季度分销市场更新

Despite increasing uncertainty, demand and activity remain robust Sector Market Observations Macro Backdrop:As much as distributorsbenefitfrom an inflationary environment,fearsof an outsized detriment from aslowdownresulted in steeper stock pricedeclines. However, a recession has yet toactualize and, as demand and backlogs remainstrong, increasing confidence in the resilienceof the economy, is driving distribution stocksto outperform again. M&A:Investors continue to be focused on thesector, particularly cycle-resistant categories.Strategicshave become more cautious inpursuing M&A given near- to medium-termrecessionaryconcerns and weighing thebenefits against cost of capital andotheralternative capital deployment opportunities. Laborand Supply chain:Supply chainbottlenecksremain but continued focus onstrategicsourcing realignment and longerpurchasing cycles have improved availability forcertaininputs.In addition,shipment costs,particularlyfrom Asia,have started tonoticeably decline. Pricing Trends:Certain commodity prices andshipping costs are beginning to abate, whichsignals a continued reduction in the pace ofinflationand could lead to growing pricingpressures. However, the current resilience ofthe economy and manufacturing seems it iscurrently expected to largely offset near termpressure. Q2 Public Company Performance Public Distributors Inflation and Supply chain Industry Quotes “We're definitely seeing some raw materials and price increasesimpacting us. We are starting to see on the freight side, particularly onocean, starting to come down. They're still at record levels. They're not atwhere we saw in 2019, but they are starting to secede a little bit. We think that's going to help us with some price flexibility in the outer quarters through the end of the year. We are seeing improvement in the supplychain side, both on the domestic and international side and I think that that's reflected in some of theimprovements in item availability for us, particularly items coming from overseas.” –Barry Litwin, CEO &Director, Global Industrial Company “Our strategy has been to protect gross margin rate. If you look at the downside of that,we wouldn't expect to see the environment pullback on pricing. Obviously, that wouldtake some time to work through. But we wouldn't see an immediate pullback in theenvironment. We'll stay competitive on that front and watch the marketplace. Andobviously, cost changes take quite some time to work through the supply chain.”–Herbert Nappier, Executive VP & CFO, Genuine Parts Company “We have some products that we distribute that are tensioned up and they're tough toget. And when they become available, people are taking everything they can get theirhands on. There are other products that are starting to ease up whether allocation hasbeen increased or in some cases, allocation has gone away. So it’s a mixed bag oneverything…. A lot of it has to do with what the raw materials that are going into thingsthat still can be tight and hard to get. So each product line is a little different” –JeffRobert Strom, Executive Vice President of Building Materials, Boise Cascade Recession Industry Quotes “When I talk to our regional leaders and our national account salesleaders and I get the tone of what they're seeing from theircustomers, I don't think there's a customer that doesn't have as strong a backlog as they've ever had in their business…. when I talk to our manufacturing customer base andour construction customer base, the proverbial canary in the coal mine is projects don't get canceled, butthey get delayed when things get softer. But there's a lot of pent-up demand because a lot of manufacturershave stuff that's sitting there ready to be finished, but they're waiting for components.” –Daniel Florness,President, CEO & Director, Fastenal Company “If you look at our segment performance, you'll see that slower growth markets,but still growth markets are retail, which is a lot of distribution centers, that marketwas way up the last couple of years. So that has certainly slowed down but is stillgrowing. Health care and government are still growing and have acceleratedrecently again but they're not as strong as general manufacturing. The industrialparts of the economy are certainly growing faster for us than the nonindustrial parts right now. So that would be my observation. I think that's certainly consistent with what we're hearing from others as well. But I thinkthe nice thing here is that we are seeing growth in all segments and the share gain is helping us.” –DonaldMacpherson, Chairman & CEO, W.W. Grainger, Inc. “We are preparing in terms of controlling costs, in terms of controllingheadcount, in terms of making sure that our inventory is in the right shapeand that our customer mix is in the right shape. We are preparing to anysituation, and we are monitoring very closely the market. When we look atthe trends, it's a little bit difficult to read because there is a compariso