After declining for two consecutive months, the seasonally adjusted October FDI (62.2) “rebounded nicely vs. September’s days- impacted 55.8 reading, remaining well in expansionary territory overall,” according to R.W. Baird analyst David Manthey.

In the October survey, 69% of respondents indicated sales were “better” vs. just 22% in September, producing a sales index of 73.4 (September 46.5).

Price increases slowed, with 77% seeing pricing gains y/y vs. 85% in September. The resulting FDI pricing index of 88.5 was “down slightly month to month but consistent with average levels seen this year.”

An 81% majority of respondents view customer inventory levels as in line with expectations, while 19% believe customers’ inventories are too low. This compares to 70% in line and 19% too low last month.

The Forward Looking Index rose to 57 from 54.7 in September, “mainly attributable to a more bullish employment picture and improved six month outlook,” Manthey writes. “At 57.0, the FLI continues to suggest market conditions are likely to remain in growth mode, although we continue to believe the rate of growth may be stabilizing some.”

Hiring sentiment was “more bullish,” with 35% of respondents reporting higher employment levels in October vs. 30% in September. A 65% majority saw employment unchanged (September 63%). The resulting FDI Employment Index was 67.3 vs. 61.1 last month.

Favorable feedback on October trends was offset by “unease surrounding tariff impacts on price/cost and demand elasticity.”

“October was the second highest month ever and our most profitable month ever,” one respondent commented. “Looking forward we have 10% tariffs coming in November and 25% in January… Our manufacturing customers’ projections have been extremely cautious and nervous – exactly the last thing any of us in the fastener industry wants to hear.”

Another participant said: “Tariffs from China are killing us and causing issues with our customers who don’t understand them and are resisting price increases.”

The six-month outlook was mixed, with 46% of respondents expecting higher activity levels over the next six months, 23% expecting similar activity, and 31% expecting lower activity. The percentage of respondents expecting higher activity this year has averaged 52%, while the percentage expecting lower activity has been just 13%.

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