10/15/2013
Distributor Index Slips Below 50
The September 2013 Fastener Distributor Index turned down, but analyst Holden Lewis doesn’t read it as a trend.
Lewis, of BB&T Capital Markets, described the 45.4 ratings as “clearly negative, but it does not incrementally sour our view of a still stagnant market. The entire erosion rests on one metric, sales and an increasingly positive outlook hints this is more September-specific than reflecting true erosion. It feels like just one bad month.”
Above 50 signals market strength and below 50 weakness. The August figure was 50.8.
Lewis pointed out that at 42.9 September distributor sales had cooled from August.
A 54% majority of the surveys anticipated better conditions in six months vs. just 6% expect the market to worsen.
“If a rough sales reading doesn’t erode optimism about the next six months, it is likely premature to conclude that market dynamics have actually changed over the past month.”
A 53% majority of distributors anticipate continuing to use master distributors for supply. Only 16% plan to reduce buying from master distributors.
The FDI is a monthly survey of North American fastener distributors. The FDI is a joint production of BB&T Capital Markets and the FCH Sourcing Network. Email: hlewis@bbandtcm.com ©2013 GlobalFastenerNews.com
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