▶CES opens two
Dallas-headquartered City Electric
Supply announced the opening of its
Livonia, Mich., branch—the company’s
seventh in the state. Tom Murphy is the
manager. The company also opened a
branch in Littleton, Colo. It is the company’s 15th location in that state; David
Lercher is the manager.
St. Louis-based Graybar has opened a
nearly 9,000-square-foot facility in Grand
Forks, N.D. The company also moved
its Huntsville, Ala., branch to a larger,
updated facility that features an addition
of approximately 11, 100 square feet of
warehouse and meeting space.
▶Rexel buys in Ohio
Rexel has acquired Brohl & Appell. Located in Sandusky, Ohio, Brohl & Appell
has seven branches in northern Ohio and
annual sales of about $26 million. It is
now part of the Rexel Automation Solutions business.
Shealy Electrical Wholesalers has relocated to a new 9,000-square-foot location in downtown Charleston, S.C.
Charlie Reed serves as site manager.
Channellock is celebrating its 130th
anniversary. The company offers more
than 140 types and sizes of hand tools
that bear its “Channellock Blue” color.
Rockwell Automation has agreed to purchase MagneMotion, a manufacturer of
intelligent conveying systems.
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A bumpy beginning marked the start of 2016 for electrical distributors and other diversified industries. Firms that depend heavily
on exports, manufacturing, agriculture, or mining faced grim prospects, while those that rely mainly on domestic consumers had much
more to cheer about. Certainly the stock market started the year with
a big negative signal. The Standard & Poor’s 500 stock index ended
2015 with a whimper—declining .7% from a year earlier. It followed
that lackluster showing with a bang—falling 8% in just the first two
weeks of 2016. Several factors are feeding the pessimistic mood.
1. A slowing Chinese economy.
China’s economy appears to be slowing
more than previously expected, and the
Chinese currency has been devalued
relative to the dollar. Those developments not only make exports to China
more difficult for U.S. sellers, but also
add to pressure on businesses that compete with imports from China.
A cutback in Chinese demand for
commodities and raw materials has
driven down the price of copper, steel,
and oil, hurting a long list of countries
with economies that depend on exports
of those items. Those countries will sell
fewer units (barrels, tons, etc.) of resources, and their currencies are also
likely to lose value. That triple whammy
—reduced production, lower sales, and
less buying power when they exchange
their currencies for dollars—translates to
a reduction in their purchases of U.S.
mining equipment, oil-drilling platforms
and services, and agricultural products.
2. Cutbacks in domestic oil and
gas drilling. Domestic oil and gas drillers are also slashing investment and
jobs, as are coal producers. These cutbacks, in turn, affect a range of suppliers
in many parts of the country, from quar-ries producing “frac sand” that keeps
wells flowing to steel pipe manufacturers and railroads hauling crude oil and
coal. All of these businesses, in turn,
provide orders—directly or indirectly—
for some electrical distributors.
The indirect impacts come through
several channels. State governments in
resource-heavy states such as Alaska,
North Dakota, and West Virginia and
local governments in cities where the
suppliers—as well as the mines or
wells—are located are trimming their
purchases and postponing capital proj-
ects and maintenance. Employees of
both the direct producers and their ven-
dors or local governments are taking
home smaller paychecks—or none.
3. A struggling retail sector. In
addition to these negatives, the retail
sector continues to struggle. On the
same day that the Census Bureau
reported that retail sales in December
slipped .1% from the month before,
Walmart announced it would close 154
stores in the United States. That follows
the outright closure of several specialty
retail chains and an announcement by
Macy’s that it would shut 40 stores.
The decline of store-based retailers does
not imply that consumers are keeping
their wallets closed. For 2015 as a whole,
retail sales increased 2.1%. That sounds
modest but is actually understated, for
two reasons. First, it includes sales at
gasoline stations, which tumbled 19% as
gas prices plunged. Sales at all other retailers actually climbed a healthier 4.6%.
Three categories did much better:
• Sales rose 8.1% at food service and
• Sales rose 7.5% at motor vehicle
• Sales rose 6.3% at “nonstore retailers” (mainly online and mail-order vendors). Until recently, the
growth of online sales has fed a
binge of warehouse construction,
but that niche now appears to be
Consumers also spent more on travel.
Vehicle miles of travel, a measure of
how far drivers are going, rose more
than 3% in the 12 months through October 2015 compared with a year earlier.
Airline, Amtrak, and intercity bus pas-