Both Asian and North American Fastener Companies Feel the U.S. Economic Recession

John Wolz

Sales and profits declined for both Asian and North American fastener manufacturers and suppliers in 2001, according to a cooperative international survey by FastenerNews.com and Fastener World magazine.\
�It�s clear that Taiwan fastener companies are not immune from the sales/profits decline reported by North American respondents,� Tony Casilio of AWP Research said. �However, the crunch is not impacting employment levels in Asia nearly as much as in the U.S., as 60% say they have not changed staff numbers versus only 35.5% of North American survey participants.�
Both Asian and North American fastener executives predict 2002 will be a better year.

� Sales � Overall, Asians rated their 2001 sales on the FIN Index at 2.8 on a scale of 1 to 5. That is higher than the 2.6 that North Americans put their own sales.
A total of 40% of Asian survey respondents reported sales increases for 2001, and 56.7% had sales declines. Only 25.6% of North American fastener companies reported sales increased, and 48.9% found sales decreased.
Both Asian and North American fastener executives are optimistic that 2002 sales will outpace last year. North Americans rated 3.7 and Asian 3.3 on the sales index.
A 53.3% majority of Asian companies anticipate modest sales increase this year, and only 16.6% expect a decrease. Thirty percent project sales will remain level.

� Profits � Asian fastener companies also reported a stronger profit picture with a 2.8 rating, compared with 2.6 for North Americans.
More than two-thirds (36.7%) of Asian fastener companies enjoyed profit increases, compared with 30.5% of North Americans. A 52.5% majority of North Americans� profits dropped, compared with 46.6% for Asians.
North Americans showed more optimism about profits in 2002 with a 3.4 FIN Index rating, compared with 3.0 for Asians.
Forty percent of Asians forecast profits will remain the same for 2002 as they received the previous year, one-third expect a moderate increase in profits, and 26.6% anticipate decreases.

� Costs � At 3.2, Asians reported higher cost increases than the 2.8 for North Americans on the FIN Index.
A 56.7% majority of Asian fastener companies reported costs remained level in 2001. Only 13.3% found costs decreased, and 30% reported increases.
One-third of North American fastener companies reported costs were steady for the year. A total of 26.9% reported increases, and 38.3% had costs decrease.
Asian and North American fastener companies are nearly identical in forecasting 2002 costs: Asians are 3.1 and North Americans 3.0 on the FIN Index.
A 53.3% majority of Asians expect costs to remain the same, while 30% anticipate a moderate increase and 16.7% a moderate decrease.

� Prices � Two-thirds (66.7%) of Asian fastener companies faced price decreases on their fasteners in 2001, compared with only 10% winning increases.
Nearly a majority of North Americans (48.9%) reported no change, 29.8% price decreases and 17% increases.
A total of 30% of Asian companies anticipate price increases in the next six months, vs. 16.7% expecting prices will drop and 46.7% forecasting prices will remain about the same.
A 56.7% majority of North Americans expect no price increases in the next six months, but 18.4% predicted increases and 13.5% decreases.
North American fastener manufacturers reported a jump in raw material prices from 2.8 at the end of 2000 to 3.2 a year later. The FIN Index for Asian raw material prices was lower at 2.6.
Slightly more Asian manufacturers (46.7% to 43.3%) reported raw material prices decreased during 2001. Only 6.7% reported raw material prices rose.

� Employment � Asian fastener employment was more stable than North America�s during 2001, as 60% reported no change in the number of employees, compared with 35.5% reporting no change in employment levels in North America and 45.4% employment dropping. A total of 23.3% of Asian companies reduced their workforce. Similar numbers (13.3% for Asia and 15.6% of North America) of employers increased the number of workers during 2001.

� Raw Material Inventory � A 60% majority of Asians reported raw material inventory was about the same as a year ago, compared with 51.4% of North Americans with lower inventories. Asian raw material inventories were rated at 2.8 in the FIN Index, compared with North Americans rating their inventories at 2.6.
Only 13.3% of Asian manufacturers reported raw material inventories were up at the end of 2001, and 23.4% were down from the previous year.

� Finished Goods on Hand � Fastener inventories dropped in North America to 2.6 on the FIN Index. The Asian manufacturers indicated inventories were slightly higher at 2.8.
A 56.7% majority of Asian manufacturers reported fastener inventories were about the same as a year ago, 23.3% found inventory lower and 13.3% higher.

� Economic Confidence � Asian fastener companies are slightly more optimistic about the North American economy. On the FIN Index with 5 being high and 1 low, Asians rated the North America economy at 3.0 while North Americans indicated they were slightly less optimistic about their own economy by rating it 2.8.
Asians rated their own economy at 2.9, Europe at 3.3, and other markets 2.6.

There were 37 Asian companies participating in the End of 2001 Fastener World and FastenerNews.com Survey and 141 North American companies.
Responses were tabulated by Herndon, VA-based AWP Research. AWP specializes in written surveys, focus groups and strategic planning. E-mail: Ajcasilio@cs.com
For more information on the FIN Survey login to FastenerNews.com. �2002 FastenerNews.com