2Q26 Preview Series – US Distributor Survey

Research evidence excerpt

2Q26 Preview Series – US Distributor Survey

Electrical Equipment & Multi-Industry

Distributors - Market Underweight

2Q26 Preview Series – US Distributor Survey June 26, 2026

Survey Says...Less Caution Under the Surface

The Wolfe Byte

The tone remains relatively bearish and it is clear that macro noise continues to defer investment decisions. But

we are encouraged by positive momentum through quarter and 2H optimism. We continue to see best risk/reward

across our short cycle stocks.

We surveyed 50 distributors between June 17-22 across 18 industrial verticals. Sentiment remains net cautious

with the upside/downside meter still negative (-8), albeit better than last quarter (-14). Continued tariff uncertainty,

inflationary pressures and the Iran conflict were drivers of continued customer caution, and this is reflected in the macro

data that reveal modest downward adjustments to consensus 2Q26 IP expectations.

However, the internals of the survey are encouraging (and more consistent with the stronger ISM), in light of better

exit rates in June, and modestly stronger growth outlooks for 3Q/2026. We are also seeing a higher percentage of large

ticket purchases and a downtick in customer caution from 1Q26 levels.

It is clear the US industrial economy remains highly divergent. Across the end market verticals, we call out

broad strength in Water & Wastewater, Metalworking, T&D, Factory Automation and Power Generation, vs. general

weakness in Truck, Homebuilding, Commercial Construction, Mining and Public Infrastructure. O&G sentiment has

notably improved vs. its long term negative trend.

Bottom line, we are not yet seeing the broad-based demand recovery, and it certainly appears that there was a

modestly negative impact from the macro noise.