The firm's industrial distribution research team, led by seniorresearch analyst David Manthey, expects declines to continuethrough 2009, though it says the trajectory should not be as severeas in the final weeks of last year, which were negatively impactedby abnormal holiday closures. The report found average revenuesdeclined 3.9% in Q4 after remaining essentially flat in Q3. Itforecasts a further 3.6% decline for the first half of '09 and a 1%for the second half. While overall pricing rose 1.1% inQ4, thegrowth was lower the 2.9% recorded the preceding quarter.

Researchers found few areas of strength, with only distributorsof rental equipment anticipated to show revenue gains. Distributorsof data communication products, fasteners and roofing and buildingmaterials are projected to experience the steepest declines. Themost promising end markets include wholesale trade, generalcontractors and the chemical industry.

In related news, the Commerce Department reported wholesalerscut back on their inventories in December by the largest amount innearly 17 years. Government economists predict continuing cutbackswill result in reductions in both transport demand andmanufacturing levels.