The seasonally adjusted Fastener Distributor Index (FDI) decelerated in October to 52.1 “mainly due to the seasonal adjustment factor as October is normally a strong month for respondents,” according to R.W. Baird analyst David Manthey.

“Consistent with this, sales trends were slightly improved on an unadjusted basis, but the seasonal-adjustment factor drove the sales index down (month-to-month),” Manthey writes.

About 38% of respondents reported sales above seasonal expectations, slightly better than September’s 35% but still well below the average 2018 level of 55%.

Pricing was stable sequentially for a large majority of respondents, but  the employment index was a “slight drag” on the FDI in October, according to Manthey.

“Overall, October market conditions were a bit weaker than would be expected given normally strong seasonal trends, but underlying momentum was fairly steady with September,” Manthey writes.

The seasonally adjusted Forward Looking Index remained stable at 44.2, though the reading represents the ninth sub-50 reading in the first ten months of 2019.

“A more bullish six-month outlook and slight improvement in respondent inventories was entirely offset by a weaker employment index and higher customer inventories.”

Hiring sentiment was a “bit weaker” vs. September, as “a very modest uptick was registered in the percentage of respondents with lower employment levels than seasonal expectations.”

However, respondent commentary was more positive than the previous month.

One respondent commented, “October was a phenomenal month for us, at least partially due to increased capacity,” one respondent noted.

Another commented” “The market seems steady. Prices up from overseas but pretty steady these days.”

The six-month outlook showed improvement month-to-month but “remains somewhat muted, with 33% of respondents now expecting lower activity six months from now (September 45%), 38% expecting similar activity (September 32%), and 28% expecting higher activity (September 23%),” Manthey writes.

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