The Fastener Distributor Index for April declined to 57.4 compared with 59.5 in March.

“In the April survey, 56% of respondents indicated sales were ‘better’ relative to seasonal expectations vs. 64% in March,” according to R.W. Baird analyst David Manthey.

This produced a sales index of 63 (March 70.1).

“Pricing gains were again noted by a large majority of respondents, with 81% of respondents seeing higher prices y/y vs. 71% in March,” Manthey wrote.

The resulting FDI pricing index of 89.1 (vs. March 85.7) was “the highest reading in FDI survey history.”

Respondents continued to comment on inflationary pressures in the channel, with steel tariffs seen as likely to lead to additional supplier price increases over the near to medium-term.

Regarding customer inventories, a majority of respondents view inventory levels as in line with expectations (63% of responses), while 31% believe customers’ inventories are too low, and another 6% see inventory levels as too high. This was relatively consistent with March (64% in line, 32% too low, and 4% too high).

The Forward Looking Index dropped slightly following last month’s acceleration, registering 58.9 in April vs. 59.9 in March as a slightly lower six month outlook and employment levels took their toll.

“Given solidly expansionary FDI and FLI readings, we believe market conditions are likely to remain in growth mode (albeit potentially moderating growth) in the coming months.”

Hiring sentiment in April was “relatively stable” among survey respondents, with 19% reporting higher employment levels in April relative to seasonal expectations vs. 29% in March, while another 81% saw employment as in line (March 68%). The resulting FDI Employment Index was 59.4, modeslty lower than March’s 62.5 reading.

“Manufacturing employment continues to trend upwards (+24,000 jobs in April), with most of the gains coming from durable goods manufacturing (machinery +8,000, fabricated metal products +4,000),” Manthey wrote. “Total manufacturing jobs added over the past year now stands at +245,000.”

Several comments highlighted the current strong pace of demand, with one respondent saying, “Sales are brisk, [we’re] having a great year!” Another distributor indicated they are “struggling to keep up” with demand, and another simply said demand is “up, up, up.”

Steel tariffs also remain a topic of heavy discussion in the industry. Several respondents expressed unease over the still-uncertain impacts of potential tariffs, with one saying, “Everyone [is] worried about how the tariffs on nuts are going to affect costs and [selling] prices.”

“We continue to see impacts from steel tariffs as likely to be net neutral to slight positively, as many distributors have historically been able to pass price increases from suppliers on to customers, while higher domestic activity levels could also be a minor positive,” according to Manthey.

“Importantly, quantitative survey data points to continued momentum through 2018, with 53% of respondents expecting higher activity levels over the next six months and 44% expecting similar activity.”

The FDI is a monthly survey of North American fastener distributors conducted with the FCH Sourcing Network and the National Fastener Distributors Association. Web: fdisurvey.com