RESCO Continues to Grow Inventory, Sees Inflation Impact on Products Stabilize
September 7, 2023
Although not garnering the amount of press as it did just a year ago, the challenges of supply chain disruptions and higher-than-average interest rates continue to impact our economy, albeit not at the levels we’ve previously seen. Most industries and sectors of the economy are seeing a consistent drop in inflation-created price increases, while at the same time, experiencing a decline in the lead times to create and distribute some of the products they make.
From a RESCO perspective, we currently are seeing the following:
- Inflation impact on the products we distribute. While still higher than in “normal” years, the price of products continues to trend downward. We project an average price inflation rate of between 8% and 10% for this year; this compares to an annual price inflation rate of 18% that we experienced in 2022.
- Lead times. We’re also seeing a stabilization of product lead times, although there are several product categories that continue to experience longer-than-average lead times. These include transformers, underground conductor, and underground rubber goods.
While the adjustment back to typical inflation rates and supply chain operations is a welcome change, it’s important for us—as well as our members and customers—to be vigilant and precautionary, as we potentially could experience these challenges again.
As we’ve reported over the past few years, RESCO has taken steps to counter these market conditions by working with our manufacturer partners to ensure we have a reliable level of inventory and to provide our members and customers with industry-leading pricing on materials, supplies, and equipment. This focus enables us to carry a record amount of inventory—which now stands at approximately $50 million—at our seven warehouses.
Our goal is—and always has been—to ensure that our members and customers have access to the products they need, when they need them. We will continue to analyze current market and supply chain conditions, as well as forecast future conditions to assist with our purchasing and inventory activities, in our efforts to provide you with reliable inventory and very competitive pricing.
Thank you for your continued support of RESCO.