Jason Sandefur

After holding steady for two straight years, the rate of cost increases dropped in 2008, with 59% of survey respondents reporting a moderate to strong rise in costs during 2008. The FIN Cost Index dropped to 3.5 from 3.6 the previous year. Costs were lowest in 2001, when the index dipped to 2.8 before soaring to 4.1 in 2004.
Just over two in 10 fastener companies found costs held steady in 2008, nearly identical to the previous year. More than 18% saw costs drop, up from the 11% that reported lower costs in 2007.
For a second straight year fewer distributors reported cost hikes, with 57.7% seeing increases in 2008 compared with 60.8% the previous year. Just under 27% of distributors reported steady costs in 2008, while 14.1% claimed costs dropped. The distributor cost index inched up to 3.6.
Distributors were more likely to forecast stable costs for 2009, with 38.5% seeing no cost increases. More than 28% expect costs to decline this year, while 23.1% anticipate rising costs as the year unfolds. More than 10% of distributors remained unsure what the coming months would do to their costs. The distributor cost index dropped to 2.9 from 3.5 the previous year.
Seven in 10 manufacturers reported rising costs in 2008, compared with 80% in 2007. Only 12% reported flat cost structures, while 18% saw “moderate” to “strong” declines in cost. The manufacturer cost index slipped to 3.6 from 3.8 in 2007.
More than half of fastener manufacturers see costs shrinking in 2009, while an additional 34% anticipate flat cost structures. Only 10% of manufacturers are bracing for cost hikes in 2009, down from the 67% who thought costs would rise during 2008. The 2009 manufacturers cost index was 2.5.
About 41% of companies anticipate cost declines this year. Nearly 35% of survey participants expect costs to stabilize in 2009, with 13.9% anticipating a “moderate” cost increase. Just under 3% of survey participants predict strong increases in 2009.
The projected overall cost index for 2009 fell to 2.7, down from the 3.5 forecast in 2008. �2009 FastenerNews.com