Service Dealer held another group video call this week, with a selection of representatives from manufacturers, suppliers and business service providers, to get their take on the current industry temperature.

As ever, we'll be keeping the participants anonymous in order to help facilitate an honest and frank conversation. We thank the group who joined us virtually on Wednesday for their time and forthright opinions.

Stocking

We began, as we have many times over the past couple of years, with discussion as to where our panel saw the current supply situation. Not that anyone was hanging out the bunting quite yet, but I think it's fair to say that a quiet optimism was sensed.

The cause of many headaches these past couple of years in terms of getting goods from factories around the world to dealer's showrooms has been obtaining shipping containers - and their attendant spiraling costs. Well this week we heard several people talk of containers finally becoming easier to get hold of and their prices reducing. These cost decreases do not mean charges are back down to where they were previously, but consensus was they had certainly reduced from their recent peak. I don't think anybody on the call expected them to ever revert to pre-pandemic levels.

This improvement in the container situation meant that bottlenecks at ports were less frequent, meaning there were slighter fewer bumps in the supply-chain road. Companies were monitoring the situation closely but hoped things were moving in the right direction.

Demand beginning to wane?

What did crop up as a result of this conversation though, was an opinion that we hadn't heard expressed before. We were told that some suppliers are sensing that customer demand might be starting to drop off.

One panel member told us that dealers were now not putting in as many orders as have been seen lately, meaning their sales teams were now out selling to dealers once again, rather than just taking orders.

Another supplier told us that their order book is still filling up quicker than they can deliver, however this increase in demand is certainly slowing, with sales not racking up at the same fast rate as they have been these past two years.

A separate view was that manufacturers are perhaps somewhat blinded to what the true current demand is in the market right now. They have been preoccupied for so long with the fulfillment of back orders, fully comprehending where today's actual demand levels are at, is difficult.

But what do you our dealer readers think? Are you starting to feel you may have enough orders in the system to fulfil customer demand? Are you sensing that customer demand that may be waning?

We were told that end users' buying habits have certainly been forced to change, with their realisation that big-ticket items are no longer available immediately. It appears that commercial customers are accepting of increased forward planning for purchases. It was suggested that so too will dealer ordering habits need to change, with increased strategic purchasing a future trend.

Just in time

If ordering habits might be in need of updating, one thing our panel was in agreement about that wouldn't be altering is the 'just in time' manufacturing philosophy.

Quite simply that is how manufacturing companies are set up to make profits for their shareholders. These huge corporations do not make money by having warehouses full of machines, sat collecting dust on pallets. They get produced, get sold, get shifted. If anything we were told the process would only become slicker.

Yes, there can be hold-ups we were told, especially with component production - which could potentially continue with some areas of the world still experiencing covid shutdowns - but in principal, there will be no change.

Just in time was also favoured as from a manufacturer's perspective it meant that their latest product innovations were always fresh to the market. The system made sure it was their most up-to-date machines that were always pushed to customers.

Recession required?

Finally, there was some discussion around an idea that cropped up via our last call with a different group of supplier representatives - that a recession was now needed in order to take the wind out of a market suffering from unrealistically high demand.

The argument last time said that the industry would never be able catch up with the machinery production required, all the time that customer clamour for product was so high. Something dramatic, such as an economic downturn, was the nasty-tasting medicine that had to be taken for 'real' demand to be revealed.

Several on the panel this time around expressed hope that a recession wouldn't hit, whilst others felt it was inevitable - "we're on a train heading right for it", is how one put it.  However, where opinion did seem to differ from the thoughts heard on our previous call, was that even if there were to be a recession, it might not have that big an impact on our sector anyway. Our old friend the weather was cited as being much more influential.

It was suggested that yes, the sales of £150 mowers by the volume retailers could see an impact if a recession bites. But dealers and manufacturers who are supplying big ticket items, to big ticket buyers, probably wont see too adverse an effect - which must be encouraging news for dealers of quality products and quality service.

A recession hits different parts of the buying public in different ways it was said. Those rich customers buying expensive mowers, tractors and robots, are likely to carry on buying those top-end goods from dealers as their bank balance and desire for those items wont really change.

We heard a confidence that the premium products offered by these manufacturers would continue to be ordered by the dealers, who in turn would not struggle to sell to their customer base. There was a genuine optimism that dealers who are not involved in box-shifting at the low-end of the market, would continue to see good sales.

Whilst they weren't 100% saying the sector is recession proof - they certainly seemed to feel it nearly was! As dealers have experienced in years gone by, what they felt would be way more problematic would be a season of extreme weather.

Once again Service Dealer thanks our panel for their time and views.