8/7/2013 2:51:00 AM
NEWS BRIEF
Grainger, Fastenal and MSC rose following a solid PMI number, but BB&T consultants question the figures for the fastener industry.
The national Purchasing Managers Index is being driven by areas that have less impact on industrial distributors, such as housing rather than fasteners, according to BB&T.
“It is not clear to us that we are going to hear a significantly improved tone from distributors as monthly sales results are released,” BB&T said of soft numbers in July’s Fastener Distributor Index. The PMI and FDI diverged for July.
Fastener respondents report inventories are lean giving the possibility of extra buying ahead.
KEY TAKEAWAY
The FDI is a monthly survey of NorAm fastener distributors. As a diffusion index, figures above 50 signal strength and below 50 signal weakness. July’s 49.7 was down June’s 51.3.
“It’s slow out there,” BB&T summarized. But “low inventories may yet presage stronger numbers, if only something catalyzed customers restocking.”
“Positive sentiment has routinely outpaced negative, but after an ebb in June optimism looked resurgent in July.” Half of the survey participants “had a higher six-month outlook (vs.29% in June), while just 8% had lower (vs. 14% in June).
“There is little fear of an erosion in demand. The monthly responses likely hinge on respondent’s views on the potential magnitude of future demand growth.”
Annual pricing was lower at 55.6 – vs. 58.9 in June – and “there is little pricing momentum in the marketplace.”
Most respondents believe customer stocks are too low (42%) or sized right (39%). Just 19% expect further inventory cuts, while 72% expect neither a further drawdown or a restocking. Only 8% report inventory rebuilding.
The FDI is a joint production of BB&T Capital Markets and the FCH Sourcing Network, the online network for industrial fasteners. ©2013 GlobalFastenerNews.com
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