ITR MONTHLY UPDATEJANUARY 20, 2021

PARTICIPATING ASSOCIATIONS

IAN HELLER - Moderator

Founder and Senior Partner, Distribution Strategy Group

MBA, Kellogg School of Management at Northwestern University

Known for his expertise for his research, consulting, analytics and thought leadership within the distribution industry

ALEX CHAUSOVSKY - Panelist

Senior Business Advisor, ITR Economics

Highly experienced market researcher and analyst with more than a decade of expertise

Featured on NPR, the BBC, and in Wall Street Journal

1/128.5%3.0%1.2%2.4%1.8%0.2%5.1%-0.6%-2.6%2.9%-3.1%1.7%-1.5%-2.3%3.4%2.8%2.8%-2.2%

-20.2%-20.9%-3.1%-4.2%-5.7%1.0%

MonthlyOct-18 5.378Nov-18 4.991Dec-18 4.866Jan-19 4.684Feb-19 4.391Mar-19 5.024Apr-19 5.050

May-19 5.266Jun-19 4.969Jul-19 5.061

Aug-19 5.099Sep-19 4.956Oct-19 5.295Nov-19 4.875Dec-19 5.032Jan-20 4.816Feb-20 4.515Mar-20 4.914Apr-20 4.031

May-20 4.164Jun-20 4.815Jul-20 4.851

Aug-20 4.808Sep-20 5.003

3MMT

15.214.513.914.114.515.315.315.315.115.115.315.115.214.714.414.213.513.113.013.814.514.7

12MMT

59.759.759.559.759.860.059.858.857.757.657.457.157.1

12/12

0.4%-1.7%-3.5%-3.5%-4.1%-4.3%-4.4%

3/12

-0.2%1.3%3.0%1.0%-7.0%

-14.6%-14.9%-9.6%-4.3%-3.0%

Rates-of-Change: A Powerful Management T

Using Checking Points at the LowCompany A

1.0%-4.4%

$5.7

2

7

12

17

-40

-20

0

20

'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24

R-O-C MMT

12/12

12MMTRaw

1/12

Billions of Dollars

#1 1/12 Low#2 1/12 UP 12/12

#3 Waiting on a 12/12 low

Phase A - Recovery

Annual Sales are BELOWYear-Ago Levels, but the Rate-of-Decline is SLOWING.

Phase B –Accelerating Growth (Best)

Annual Sales are ABOVEYear-Ago Levels, and are GROWING at a RAPIDPace.

Phase C – Slowing Growth (Caution)

Annual Sales are ABOVEYear-Ago Levels, BUT the Rate-of-Growth is SLOWING

Phase D -Recession

Annual Sales are BELOWYear-Ago Levels, and are DECLINING at a RAPIDPace.

Business Cycles7

50

70

90

110

130

150

-150

-125

-100

-75

-50

-25

0

25

50

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Data TrendROC

Rates-of-Change – A Management Tool8

8

Generating the Quantitative Forecast9

ITR Long Term Business Cycle Theory News and Market Observations

Leading Economic IndicatorsInternal Trends

Leading Indicators

-20

-16

-12

-8

-4

0

4

8

12

-30

-24

-18

-12

-6

0

6

12

18

'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24

Leading IndicatorIndustry Data

Industry Data - 12/12ITR Leading Indicator - Monthly

Sources: FRB, ITR EconomicsRates-of-Change

10

Dec 2020

May 2011May 2010

The Indicator has a 12-month lead time to the Industry Data

Monthly12/12

U.S. Economic Leading Indicators

Sources: ITR Economics, Institute for Supply Management, OECD, Yahoo Finance, The Conference Board, US Census Bureau, FRB

Indicator Trend CommentsITR Retail Sales Leading Indicator Rise Positive through next four quarters…

ITR Financial Leading Indicator Rise Positive through next four quarters…

JPMorgan Global PMI Rise Positive through next four quarters…

OECD Leading Indicator Rise Positive through next three quarters…

G7 Leading Indicator Rise Positive through next three quarters…

Purchasing Managers Index (PMI) Rise Positive through next four quarters…

ITR Leading Indicator Rise Positive through next three quarters…

Wilshire Total Market Cap Rise Positive through next three quarters…

US Leading Indicator Rise Positive through next two quarters…

Single-Family Housing Starts Rise Positive through next three quarters…

Total Industry Capacity Utilization Rise Positive through next two quarters…

US Exports, Goods – World Rise Positive through next quarter…

QUESTIONS?

THANK YOU!NEXT ITR UPDATE:

FEBRUARY 17, 2021