At 56.9, the seasonally adjusted November Fastener Distributor Index was down from October’s level of 62.2, according to R.W. Baird analyst David Manthey.

“In the November survey, 50% of respondents indicated sales were “better” relative to seasonal expectations – down vs. a record 73% in October but nevertheless still much improved vs. average 2016 levels (31%),” Manthey writes.

November’s seasonally adjusted sales index of 72.8 suggests selling conditions still remain very strong overall.

“Pricing was again a solid tailwind as 63% of distributors saw higher prices y/y (up slightly vs. 60% in October). This produced an FDI y/y pricing index of 78.1, a modest acceleration vs. last month’s 75.0 reading and consistent with strong YTD levels,” according to Manthey.

A majority of respondents continue to view inventory levels as in line with expectations (75% of responses), while 25% see inventory levels as too low. This was relatively unchanged vs. October results of 80% and 20%, respectively.

The seasonally adjusted FDI Forward-Looking Indicator decelerated for the second straight month in November to 57.7 vs. last month’s 59.1.   

Hiring sentiment was slightly lower among survey respondents.

“13% of respondents indicated employment was higher in November relative to seasonal expectations vs. 27% in October, while 81% saw hiring levels as in line with seasonal expectations (October 60%).

This resulted in an FDI Employment Index of 53.1, down from October’s 56.7 reading.

“Qualitative responses on current market conditions were fewer than typical this month,” Manthey writes. “That being said, survey commentary was a bit more split in tone.”

One respondent expressed skepticism that current strong growth is not sustainable throughout 2018, saying, “While it feels like the ride up is never ending, [I] can’t help but feel like it will run out by end of the 1st quarter 2018, level for a bit and then maybe fall out.”

Another respondent, on the other hand, noted strong backlog as a cause for optimism, saying, “[We’re] maintaining a large backlog compared to [the] same time-frame last year.”

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