The seasonally adjusted Fastener Distributor Index (FDI) continued to slow in December, dropping to 44.4 from 46.7 the previous month, according to R.W. Baird analyst David Manthey.

“This was driven by slightly softer selling conditions, which produced a seasonally adjusted sales index of just 34.9 vs. 35.5 last month, as well as deterioration in the survey’s employment component,” Manthey writes.

For the second consecutive month, 56% of respondents saw sales growth below seasonal expectations, while just 19% characterized sales as above seasonal expectations.

Pricing remained stable sequentially for a large majority of respondents.

The seasonally adjusted Forward Looking Index decelerated to 46.2

“While the relative sequential stability is encouraging, this month’s reading nonetheless remains below the neutral level of 50 and represents the eleventh sub-50 reading of 2019, signaling expectations for a somewhat sluggish start to 2020.”

Hiring sentiment again remained relatively stable, with 81% of respondents characterizing the pace of hiring as similar to November.

Demand feedback suggests a “generally weaker pace of business activity,” Manthey writes.

“November/December [were] down from the earlier months of 2019,” one respondent commented. “Customers pushed out deliveries to 2Q20 instead of taking in inventory at end of 2019.”

Another commented: “Heavy Truck market showing considerable slowing for the past couple months.”

The six-month outlook deteriorated, with 28% of respondents now expecting lower activity six months from now (November 27%), 47% expecting similar activity (November 42%), and 25% expecting higher activity (November 30%).

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