The effect of Covid-19 had hit manufacturers much worse than distribution as of June 1st. This is due to distribution tightening down on working capital. This was certainly to be expected as so much uncertainty has surrounded the economy and our industry.
With lockdowns in New York, New Jersey, New England, Pennsylvania, Michigan, Minnesota, California, the Northwest, the provinces of Ontario and Quebec, I’m amazed that we as a group are doing as well as we are. Municipal spend is still relatively healthy and that’s without an infrastructure package. Private work continues to surprise on the upside as many so-called experts were calling for a major slowdown in housing due to the pandemic. Right now, inventory is low and demand is increasing so in the short term we should be OK.
The wild card is what happens this fall. Will there be a second round of Covid-19? Will the states that opened up first regret it? Will herd immunity along with a vaccine lead us back to the good old days, which was quarter one? I’m an optimist by nature so I’m betting that the worst is behind us and it’s onward and upward from here!
We at SIGMA are extremely pleased that we have had very few cases of Covid-19 to deal with nationally. Social distancing, working remotely, and adhering to federal Covid-19 guidelines have certainly been the reasons so far and that will continue. From a business standpoint, after a terrific first quarter we encountered a slowdown in April and May, but May showed signs of improvement at the end of the month. Our Raven Product Line continues to outperform all other products as we are running well ahead of plan. The future for our domestically manufactured HDPE Meter Boxes looks very bright.
We thank all of you for your support and friendship during these unprecedented times and wish all of you good health and success in the coming months ahead.
Sincerely yours,
Larry