Sales Growth: Sales declined 2.2% y/y on average in February, following a decline of 0.3% y/y in January. The slightly softer trend in February relative to January is attributed to one fewer working day y/y. Price contributed 2.7% y/y to growth in February, which implies underlying volume declined ~4.9% y/y. On an adjusted basis, we estimate y/y sales and volume growth accelerated ~100bps in February compared to January.  

End Markets: Just 1 of 14 verticals grew in February, down from 5 in January. Oil & Gas was the lone positive market while Ag Equipment, Construction Equipment and Automotive headlined the weakest markets in February. Sequentially, 4 end markets were reported as stronger in February vs January compared to 10 markets noted as weaker.

Orders / Book-to-Bill / Backlog: Orders increased 0.1% y/y in February, up from the 2.6% y/y decline in January. Book-to-Bill was above 1.0x for the 3rd consecutive month at 1.07x, down slightly from 1.11x in January. Backlogs declined for the 21st straight month, falling 4.3% y/y in February compared to a decline of 13.1% y/y in January.

Inventory: Inventory sentiment was noted as “too high” by a net 31% of participating firms in February which is the best reading since late 2022 and down from the January reading of net 44% “too high”. On an absolute basis, inventories are reported up 3.5% y/y on average in February, compared to 1.7% y/y growth in January. 

2025 Full Year Outlook: The average full year outlook for 2025 was revised lower by 120bps, now calling for full year sales to increase 7.0% y/y, down from the average outlook of 8.2% growth last month. 

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