WOLF releases LBM index

Building materials distributor WOLF has announced the creation of a proprietary new metric aimed at measuring how building materials buyers see the near-term future of the residential construction industry.

The WOLF Key Buyer Index (KBI) will gather from a monthly survey of key buyers at independent building materials dealers in the distributor’s 18-state sales territory. The initial survey, from the week of March 23, found that 63.8% of respondents reported their purchasing would increase over the following four weeks, 31.9% said purchasing would remain about the same, and 4.3% said purchasing would decline.

Based on these responses, WOLF calculated the initial Key Buyer Index at 79.8. A WOLF KBI score of 50 reflects a neutral outlook, a score above 50 reflects a positive outlook, and a score below 50 reflects a negative outlook.

CEO Tom Wolf, who created the new industry metric, said that the initial KBI indicates optimism for April among buyers -- the group best positioned to offer an informed assessment.

“WOLF maintains ongoing communications and close relationships with hundreds of independent dealers,” Wolf said. “The WOLF KBI captures their near-term sentiment in a statistically significant way that informs dealers, manufacturers, builders, the media and others.”

Wolf noted that the company calculates the KBI using a formula similar to the monthly Purchasing Managers Index (PMI), a highly anticipated monthly indicator developed by the Institute for Supply Management.

WOLF will publish the Key Buyer Index each month in an effort to forecast industry sentiment and identify trends. WOLF will also develop a workable set of statistical adjustments for the index to reflect seasonal, market and product-category variations.

For more information on the WOLF Key Buyer Index, read the detailed explanation on Tom Wolf’s blog or see the latest KBI score at wolfleader.com.