FIRST ON ID Changing Constants Impact Distributors in ‘25 T here’s never a dull moment in this industry, and this year’s Survey of Distributor Operations feels like year ve on the same roller coaster. The report starts on page 16, and I’ll let you tackle that on your own; suf ce it to say, there’s some good, some bad and some ugly — though this annual touchpoint is nothing if not informative, even for us. The hard data is good at creating a cumulative snapshot, and you’ll see that re ected in the charts and percentages. But that still leaves a little to be desired — and one of the best ways to read the tea leaves, in my opinion, is in reviewing the individual commentary that survey respondents provide. Augmenting a composite view, you often get a more colorful representation of both optimism and angst, depending on the respondent. We asked participants to elaborate on anything else that was relevant to their businesses, and the following comments serve as a representative sample of what’s, generally, top of mind: • “Economic growth in the U.S., or lack thereof.” • “The supply chain still needs to get better.” • “Taxes are killing us.” • “Pay scales are outdistancing in ation.” • “[Tariffs] are punitive taxes on American companies and ultimately the consumer or end-user. INSANITY!” No surprise, tariffs had a starring role in this year’s report. And while their use has been supported by some of our respondents, we by and large see distributors struggling with the change and desperate for some transparency. Because of this, the background noise in what may have been an unremarkable year has become overwhelming. And the change is being re ected in many ways. Reuters reported in early May that the number of M&A deals announced globally in April fell to the lowest level in more than two decades. A constant backdrop within distribution, will consolidation continue to slump, or is this a temporary pause as the world resets? Lorenzo Paoletti, a managing director of investment banking at Truist Securities, told Reuters he is advising clients to wait on closing deals, adding, “CEOs and CFOs haven’t fully understood how tariffs will hit them yet, so it’s better to keep cash on hand” until more clarity emerges. Unfortunately, clarity has been elusive. At least we can say we’ve gained some experience over the past few years. In fact, some distributors have reached the point where pivoting is part of their DNA. For one current example, check out page 9 for details on how Optimas Solutions is addressing tariff changes in real-time. Meanwhile, consider that even as the constants change, we’re all in this together. Here at Industrial Distribution, we aim to continue to provide insights as conditions evolve. On that note, I’d like to take a moment to thank those who completed our survey. We couldn’t do this without your input, especially now, when things are in a state of ux. Keep at it, and keep the comments coming. They’re invaluable, and we’ll share as much as we can. More comments on the state of your business or the economy? Email me anytime: Anna@ien.com . ID May/June 2025 | INDUSTRIAL DISTRIBUTION 5 Anna Wells Executive Editor anna@ien.com No surprise, tariffs had a starring role in this year’s report. www.inddist.com
Industrial Distribution May / June 2025: Page 5
