U.S. industrial production and heavy manufacturing sales remain anemic, according to a recent Baird survey of more than 500 distributors in various channels.

Non-residential construction continues strong with growth. If the federal government accelerates infrastructure spending, there could be growth in the commercial construction sector.

Aggregate growth in industrial supply turned slightly positive for the first time in more than a year. Metalworking came in 0.9 percent down, but that is the best reading in about two years. The 2017 forecast for the group calls for three percent growth.

Average industrial pricing basically stayed flat although general industrial and safety both deteriorated this past year. But metalworking and OEM fasteners were positive, reflecting increasing steel prices. In early 2017, respondents reported an uptick in pricing, but increases were elective increases as opposed to broad-based.

 Companies with 10 to 100 employees are a prime target for distributors this year. Many of these mid-size businesses perform above average.

Distribution in 2017 is at a tech tipping point. Customers still purchase from direct contact and through print, but many shop digitally. Distributors are investing in e-commerce, customer relationship management, mobile sales, pricing and cloud computing.

Distributors are increasing training to retain talent, and also career development and better pay. Non-compete and confidentiality clauses are increasingly important, as are the multi-generational workforce and adapting to millennials’ expectations.

Tech and digital challenges will hurt distributors that do not make a concerted effort to stay on top of them.