Respondents reported an average sales-per-employee number of $400,000 for 2006. Contrast that number with $640,910, the average sales per employee for the 139 respondents to this year's Top 200 survey who provided both sales and employee figures for 2006. Regional sales-per-employee numbers are provided on page 30. How does your company's productivity compare with the national and regional averages when it comes to sales-per-employee?

For the full-year 2007, 60.1 percent of the respondents expected their companies' sales to increase over 2006, 18.8 percent expected sales to stay the same, and 19.1 percent expected to see sales decrease. If electrical wholesalers' 2007 and 2008 forecasts for increases of 5.8 percent and 5.7 percent, respectively, bear true, then 2007 marks the end of a three-year run of annual double-digit revenue growth.

Looking ahead at 2008, 59.3 percent of electrical distributors expect their sales to increase over 2007, 9.3 percent expect sales to decrease, and 27.1 percent forecast that their sales will remain the same from 2007 to 2008.

Still, DISC Corp., a leading electrical industry market analysis and forecasting firm, expects total industry sales in 2007 to increase 3.9 percent over 2006. For 2008, the firm currently anticipates growth of 1.4 percent over 2007. (See page 46 for more DISC forecasts.)

Some of you may be asking yourselves, “Why do the DISC and Electrical Wholesaling forecasts differ?” Electrical Wholesaling and DISC Corp. take different approaches to forecasting electrical distributor sales — DISC through quarterly projections based on economic indicators and Electrical Wholesaling by obtaining consensus predictions from electrical distributors via its annual survey. Both begin with the Census Bureau's Economic Census of Wholesale Trade, which is taken every five years. Both methods are acceptable means of forecasting sales, but each method reaps different results.

Another difference between the two forecasts is that EW does a survey of what distributors think will happen, while DISC develops its forecast by analyzing performance of the economic indicators that directly impact electrical distributor industry sales. DISC evaluates each major segment/customer type separately. In most years, the forecasts are separated by a few percentage points. But EW’s editors have found that its survey respondents are often a bit optimistic, when their forecasts are compared to the following year’s sales data. This may be the case this year, and that the actual growth in 2008 will be in the low single digits. That’s lower than the 4 percent to 8 percent growth that the industry has averaged over the past 20 years.

Through the MPG, Electrical Wholesaling is simply reporting the net result of the separate forecasts its readers have provided. Although the editors of the magazine feel quite comfortable with the margin of error for the national forecast numbers the magazine provides, we'd like to caution readers when using the regional sales forecasts. Because the regional forecasts are often based upon a small sample size, they come with a greater margin of error.

Some folks in the industry have questioned the data provided in the Product Mix, the Market Mix and the Customer Mix. Again, Electrical Wholesaling's editors feel pretty good about the national numbers, but we caution individuals when using the regional breakdowns for the Mixes because of the smaller sample size.

Ultimately, though, the numbers are the best ones available. The only way they can be better is if more electrical distributors respond to Electrical Wholesaling's annual survey.

The market-planning data is divided into nine regions of the United States. For each region and state, you'll find sales forecasts for this year and next year, along with the three prior years' sales. In addition to the sales forecasts, which are prepared by Electrical Wholesaling's research department, you'll also find an economic snapshot of the region and employment statistics for four of electrical wholesalers' major customer groups: electrical contractors, the commercial market, the industrial market and government.

The employment numbers help develop forecasts for customer buying potential. A slight change to the way this year's numbers are reported: In several of the MSAs listed, the data on electrical contractor employment have for years been reported as a range — sometimes a bafflingly broad range — and in past years, we've reported those markets as “not available.” This year, after some consideration, we decided to report those ranges as we found them. Based on local-market intelligence, electrical distributors in those markets should be able to judge where in that range reality falls. The basis for employment data comes from the Bureau of Labor Statistics or the Census Bureau.

If you're looking for sales breakdowns for full-line distributors' key customer and market segments, you'll find the Customer Mix and Market Mix on pages 43 and 46, respectively. Both were updated last year.

The Product Mix data found on page 44 gives valuable insight into the product areas that have the most mind share with electrical distributors. This data was updated this year, and some of the product categories have been consolidated or eliminated because their contribution to electrical distributor sales were consistently less than 1 percent over the years. See the text accompanying the chart for a full explanation of the changes.

Getting the full picture on a market area isn't that difficult. When developing any market forecast, gathering some basic data on the size and makeup of the market is the first step. Let's take a look at some of the ways you can crunch the numbers we've provided to tailor them to your specific business and market.

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