Industrial Distributor Survey: North America Q3'26: Stronger Volumes & Improving Supplier/Customer Pricing Gap + FAST Preview

Morgan Stanley, with the help of AlphaWise, conducted an online survey among 92 distributors of Industrial Equipment across the United States from September 3rd, 2026 through September 30, 2026. Q3'26 volumes came in well ahead of expectations, with 48% of distributors reporting better-than-expected results (8% significantly) vs. just 12% worse, and net expectations reached the highest level since 3Q22. Downturn concerns eased, with only 15% expecting a downturn over the next 6 months. The most notable improvement was in price/cost: supplier price pressure cooled (54% raising price vs 68% in Q2) while customer pricing held (46%), narrowing the customer-less-supplier price gap to -7ppts from -24ppts, a favorable setup for distributor margins. However, channel build broadened, September sequential momentum slowed, and FY'26 volume expectations moderated to +2.2% from +2.8%, shifting the debate to the durability of growth into Q4/2027. The report prefers scaled players with pricing levera