The seasonally adjusted Fastener Distributor Index improved to 56.9 in June vs. May (45), “consistent with an improvement in last month’s forward-looking indicator.”  Last month marked FDI’s return to expansionary readings for the first time since February.

Additionally, the seasonally adjusted sales index showed very strong improvement, surging from 28.9 in to 69.9 in June.

“Sales trends were better than seasonally expected for a majority of respondents, the first time that has occurred since January,” R.W. Baird analyst David Manthey wrote.

Pricing remained stable for most respondents.

The Forward Looking Index continued to improve, increasing to 52.6 from 43.9 the previous month.

“Respondents are on balance once again feeling more optimistic than pessimistic about the six-month outlook, while employment has also started to return to more normal levels,” Manthey wrote.

These two factors primarily accounted for the month-to-month improvement in the Forward Looking Index.

“With the FLI improving for three straight months and the US economy continuing to reopen, we believe the FDI could see steady improvement in the immediate term, albeit conditional on widespread government-mandated shutdowns not re-occurring,” according to Manthey.

Hiring sentiment improved as well.  The FDI employment index registered a 56.6 reading, also a significant improvement from last month (40.0). The percentage of respondents noting lower employment levels than seasonally normally decreased to just 11% vs. an average of 40% seen over the last three months.

Respondent commentary remained uneven, however.

“Although June seems to have been better than expected for most respondents, and momentum is clearly improving, many participants still characterize the recovery as slow and somewhat uneven to this point,” Manthey noted.

One respondent commented: “Slow recovery but at least positive trend after the shutdowns in April and early May.”

Another commented. “Have experienced more customer demand [increases] but [some] don’t believe our industry will see normal levels for some time.  Too many variables especially related to the pandemic that can impact the economy.”

Attitudes about activity over the next six months compared to today are more positive than negative on balance, however, with 61% of participants expecting higher activity levels and just 11% expecting lower.

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