Global Fastener News

October FDI Gains Momentum

October FDI Gains Momentum
November 08
21:33 2017


The Fastener Distributor Index for October ticked up to 62.2, according to R.W. Baird analyst David Manthey.

“Qualitative commentary on market conditions was again mostly positive with respondents noting strong demand, generally favorable end-market conditions, and a healthy pricing environment,” Manthey writes.

In the October survey, 73% of respondents indicated sales were “better” relative to seasonal expectations – the “highest in FDI survey history and up significantly vs. September levels of 57%.”

This month’s seasonally adjusted sales index of 80.1 suggests selling conditions remain very strong overall, according to Manthey.

“Pricing was again a solid tailwind as 60% of distributors saw higher prices y/y (vs. 2016 average levels of just 30%). This produced an FDI y/y pricing index of 75.0, down vs. last month’s very strong 83.9 reading but s ll very consistent with strong YTD levels.”

A majority of respondents continue to view inventory levels as in line with expectations (80% of responses), while 20% see inventory levels as too low. This compares to August results of 54% and 36%, respectively.

October’s Forward-Looking Indicator decelerated to 59.1 vs. last month’s YTD high of 66.9. The Forward-Looking Indicator averaged 49.7 during 2016, but has averaged 61.3 year-to-date in 2017.

“Given solidly expansionary FDI and Forward-Looking Indicator readings, market conditions appear likely to remain in growth mode in the coming months,” Manthey writes.

Manufacturing employment remains stable.

“Hiring sentiment was relatively stable m/m among survey respondents. 27% of respondents indicated employment was higher in October relative to seasonal expectations vs. 25% in September, while 60% saw hiring levels as in line with seasonal expectations (September 64%).”

Survey commentary on current market conditions was once again mostly positive. Demand remains overall healthy amid favorable end markets.

Looking forward, most respondents expressed a generally favorable outlook, with 90% expecting stable to higher activity levels over the next six months.

“As one respondent put it, “[I] think the overall activity will be the same or slightly better, however, [the] end of the year tends to be slow so two of the next six months can impact the growth.’”

The FDI is a monthly survey of North American fastener distributors conducted with the FCH Sourcing Network and the National Fastener Distributors Association. Web: fdisurvey.com

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