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Distributor Group Says Recession Close to Bottom

Intel has said the PC market has hit bottom, and analysts and at least one distributor seem to agree, even if some significantnaysayers remain. But adding to the it’s-not-getting-any-worse camp, this week the Global Technology Distribution Council, a consortium of IT distributors, says that the sales declines that the industry have experienced are slowing down […]

Written By

Jessica Davis

May 14, 2009

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Intel has said the PC market has hit
bottom, and analysts
and at
least one distributorseem to agree, even if some significantnaysayers
remain.

But adding to the it’s-not-getting-any-worse camp, this week the Global
Technology Distribution Council, a consortium of IT distributors, says that the
sales declines that the industry have experienced are slowing down month over
month sequentially.

The GTDC, whose members include Ingram Micro, Tech Data, Avnet, Arrow and
D&H Distributing, collects sales data from each of its members every month
and has seen the declines slow since the worst month—January.

“The phrasing I’ve been using is that things are increasingly less worse,” says
Tim Curran, CEO of the GTDC. “It’s
still pretty bad, but less bad.”

Curran says that sales in the United States
dropped 21 percent in January year over year. In February sales were down 19
percent. And in March they fell 18 percent. (April numbers are not yet
available.) The decline is slowing.

According to Curran, past recessions have yielded a more solid recovery.

“They are what they call ‘V’ recessions—a sharp downturn and then a sharp
upturn,” he says. “People are referring to this as an ‘L’ recession. It bottoms
out, but then it stays flat.”

And that’s a bit of a relief given how deep the fall has been. The banter about
town among those who are just weary of the bad news is that flat is the new up—flat
is something to celebrate.

“It’s not time to throw a party, but it’s better,” Curran says.

Bright spots—and by bright he means less bleak than the rest of the market—are
netbook, wireless 802.11n technology and NAS (network-attached storage) sales.
As for vertical industries, government and health care remain more stable than
everyone else.

The GTDC released the new numbers at the organization’s annual Investor
Relations Conference, an event designed to bring together IT distribution and
other technology executives with institutional investors to help them
understand the business.

According to Curran, distributors and even a financial analyst said at the
event that one of the factors that had impacted the sharp sales decline in this
recession is easing up—access to credit. And while the bulk of economic
stimulus money isn’t expected to be available this year, Curran says sales may
be picking up in anticipation of those funds.

Distributor Group Says Recession Close to Bottom

Jessica Davis

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