The seasonally-adjusted Fastener Distributor Index for July rose to 5.2., recovering after weak June results (48.3), which saw the FDI dip below 50 for the first time since early 2017, according to R.W. Baird analyst David Manthey.

“A slight uptick in the percentage of respondents perceiving customer inventory levels as ‘too low’ was the primary driver of the recovery,” Manthey writes.

From a sales perspective, 18% of respondents experienced sales above seasonal expectations, slightly weaker m/m (June 23%) and well below average 2018 levels (55%).

Pricing was relatively stable.

The seasonally-adjusted Forward Looking Index edged up (44.9 vs. 44.4), but was still the sixth sub-50 reading in seven months.

“Of the FLI’s components (employment index, respondent inventories, customer inventories, and six-month outlook), all but customer inventories weakened sequentially,” Manthey writes.

The six-month outlook retrenched further with respondents still seeing contraction on balance in late 2019.

Hiring sentiment was stable “as hiring was again in line with to above seasonal expectations for nearly all fastener distributors, consistent with June and May.”

The tone of qualitative commentary “remained cautious” this quarter.

“[There] seems to be a little slow down in the fastener world,” one respondent said. The six- month outlook was “mildly more bearish,” with just 21% of respondents expecting higher activity, 32% expecting similar activity, and 47% expecting lower activity.

“Putting this into context, however, the percentage of respondents expecting lower activity has soared vs. the 16% in April, representing the most pessimistic reading since mid-2012.”

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