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Experts Weigh In on the Economy.

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Experts Weigh In on the Economy

BY BILL SWICHTENBERG

Cautiously optimistic is the approach many jan/san experts are taking in regard to 2009.

While the general economy took a beating in 2008, many jan/san distributors fared much better. Even faced with shrinking margins from raised fuel prices last summer and a depressed manufacturing sector, distributors found ways to profit.

More importantly, what can distributors expect next year? Maintenance Supplies contacted some of the industry's experts to look back at last year and give their views on 2009.

Some general advice and predictions for next year include:

Pricing and budget control will be even more critical in 2009.

Value-added distributors will fare better.

The possibility for consolidation in both the manufacturing and distribution sectors is strong.

The trend to purchase more environmentally preferable products will continue.

John Garfinkel, executive director of the ISSA

How did jan/san distributors fare in 2008?

Distributors had a reasonably good sales year, averaging up 5 to 6 percent in sales, although slowing in October/November. As usual, they had to struggle with margin pressure, which was unusually difficult during the spring and summer because of fuel costs.

Outlook for next year?

Jan/san is made up of two major classes of product: capital goods and disposables. Capital goods (machinery) tend to react early to economic cycles, and are now experiencing a slowdown. Disposables (tissue products, chemicals, mops, etc.) normally lag an economic downturn or upturn. These are impacted negatively after unemployment acceleration, so they should expect to see a slowdown in orders in the near term.

With recent unemployment trends, I recommend that our members be reluctant toward expansion risks or increasing employment levels, while minimizing debt. Those with a good balance sheet will be in a better position to gain market share. Finding significant efficiencies and cost cutting should be a key to business success for 2009.

What...

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