Distributors increased their sales in the second quarter of 2016 by 3.2%, according to new data from ASI. The increase is up from 1.4% in the first quarter of this year, and slightly higher than the 3.1% reported in the second quarter of 2015.

The quarterly sales study conducted by ASI found that sales growth was strongest among larger distributors (those generating more than $1 million in annual sales), with a 3.5% year-over-year increase in Q2. Meanwhile, small distributors ($250,000 and under in annual sales) reported an increase of just 0.1% and mid-sized distributors reported a decrease of 1.5% for the same time period.

“These numbers mirror what we’ve been seeing,” said David Woods, president and CEO of Top 40 distributor AIA Corporation (asi/109480). “Economic growth has been modest but steady, and there’s a great deal of uncertainty in the world, so many buyers are exhibiting caution. Larger distributors continue to grow, while smaller distributors find it difficult to make the investments required in technology and marketing resources to be competitive.”

The report also found that over a quarter (27%) of distributors reported an increase in Q2 sales this year when compared with Q2 of 2015, while 24% reported a decrease and 49% stated that sales remained the same. Meanwhile, the number of distributors reporting an increase in sales from quarter to quarter is decreasing; 30% reported an increase in Q1 and 36% in the last quarter of 2015.

“Almost the same number of companies is up as is down in Q2, with about half being flat,” said Craig Nadel, president of Top 40 distributor Jack Nadel International (asi/279600). “I think larger clients look for major projects, e-commerce abilities, better compliance and so on, so larger distributors’ sales might be up at a higher rate than those at the smaller ones.”

Larry Cohen, CEO of Top 40 distributor Axis Promotions (asi/128263), said his company had a robust second quarter in 2015 and saw about the same numbers for the second quarter of 2016. However, he’s not surprised at the gradual decrease in distributors’ reported sales growth across the industry. “It makes sense given the uncertain direction of the economy and global turmoil,” he added. “Many distributors are feeling uncertain today. One recently told me his business is on a ‘monthly roller coaster.’”

Jack Nadel International has maintained an increase in sales each quarter, in large part because of the source of much of its business. “We get a disproportionate amount of business from California, which has been doing pretty well these past few years,” said Nadel.

Meanwhile, the Counselor Confidence Index, which gauges the health and optimism of distributors, has stayed flat at 111, the same as the first quarter of this year, but is down from 114 in Q4 of 2015. Woods attributed this to continued uncertainty in the first half of 2016.

“Our highly contested and controversial presidential race this year, plus wars, civil unrest and an unusual amount of violence in the streets in the U.S. and abroad are all contributing factors,” he explained. “Overall, this makes end-buyers cautious.”

Just four in 10 distributors expect sales to increase in 2016, compared to 16% who expect a decrease and 44% expecting numbers to remain the same vs. 2015 numbers. Woods expected AIA to end 2016 at 4% or 5% above 2015 numbers.

Added Cohen, whose company had a strong 2015: “I’ll be very happy if we’re up slightly or even flat this year. We had good growth last year.”

In April, ASI reported that distributors saw a 1.4% increase in sales in Q1 vs. the last quarter of 2015.