Distributors Predict Price Hikes will Continue

John Wolz

Inventory turnovers for distributors dropped for a third straight year, falling 10% to 3.7. Inventory turnovers for distributors were the lowest since FIN began tracking them in 1994.

Meanwhile, the FIN Survey Gross Margin Index edged up to 38.4% in 2004, reflecting relatively flat profit increases for the year.

More than 71% of distributors experienced “moderate” or “strong” cost increases during the year, while only 14.3% reported costs remained steady in 2004. Three out of four distributors predict costs will continue to rise in 2005.

More than 92.2% of respondents increased prices last year, and a hefty 75% predict they will hike prices in the coming six months. Not one of the 77 distributors who participated in the FIN Survey cut prices in 2004.

Nearly 80% of distributors had problems obtaining fasteners during 2004, with 20.8% having “significant” difficulties. Only about 20% of distributors reported no fastener supply problems. \ �2005 FastenerNews.com