Economy begins recovery, MRO buyers told at Grainger event

More than 2,000 customers get news on economy, industrial distribution industry

Susan Avery -- Purchasing, 1/18/2010 6:36:12 PM

MRO buyers got word on the economic recovery as well as a report on the state of the distribution industry  on Monday at the opening session of the Grainger 2010 Total MRO Solutions customer event in Orlando, Fla.

More than 2,000 customers, many of whom are purchasing professionals with responsibility for sourcing MRO goods and services, attended the event which features educational seminars, networking opportunities and a trade show with more than 400 of the industrial distributor's manufacturer suppliers.

Nigel Gault, chief U.S. economist at IHS Global Insight, told attendees that the economy started to grow in the second half of 2009, but cautioned that "the recovery would not be gangbusters".

The economy, he explained, "got a boost from the turn in inventory cycles and from fiscal and monetary policy." In fact, forecasts show GDP (gross domestic product) for the fourth quarter, rising 5%. However, it appears unlikely that the economy will be able to sustain that growth. Reasons: Lingering unemployment and losses in commercial real estate.

Continuing on the theme of the economy, David Manthey, a senior analyst with Robert W. Baird, said at the session that the recovery would be "subdued" for companies in the distribution industry. Results of a survey of industrial distributors he conducted show revenues starting to pick up in the fourth quarter of 2009 and climbing just 2.4% in 2010. Beyond that, he said, the industry will continue to see consolidation.

In his welcome address, Jim Ryan, chairman, president and CEO of Grainger, told attendees that the event, which takes place Jan. 17-19, will be "about learning and networking with people who can help them run their business."