The Fastener Distributor Index (FDI) improved to 62.6 in December from 54.5 the previous month, primarily driven by a strong expansion in the sales index.

Two-thirds of respondents saw better-than-seasonally expected sales, boosting the sales index to an “unusually strong” 90 during a typically soft holiday period.

“The employment index and supplier deliveries were also positive contributors to the FDI’s expansion,” R.W. Baird analyst David Manthey wrote.  “Pricing continued to move slightly higher amid raw material inflationary pressures and freight increases.”

The Forward Looking Index also improved, rising to 65.7 in December from 63.2 in November.

All four components of the FLI (employment, respondent inventories, customer inventories, and six-month outlook) improved during December.

“With the FLI well above 50, customer inventories getting increasingly low, and continued improvement registered in respondents’ six-month outlooks, we believe the FDI should see additional expansionary readings ahead, implying continued m/m improvement even though sales trends may remain lower y/y for many respondents until comparisons ease significantly in March/April,” Manthey wrote.

The employment index increased to 58.8 from 52.7.

Respondent commentary remained positive in the final month of 2020.

One respondent characterized his 2021 outlook as “surprisingly good.”

“December is typically a slow month but this year it was up significantly compared to what we normally expect,” another respondent noted.  “Material pricing is increasing in Q1.”

Regarding activity levels over the next six months, 79% of respondents expect higher sales, while 6% expect lower activity.

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