11/6/2012 12:24:00 AM
NEWS BRIEFS
FDI: Fastener Distribution Sales Up in October
Source: BB&T Capital Markets’ estimates, FCH Sourcing Network, Institute for Supply Management
What about discounting?
“We believe this survey has made clear that pricing in the fastener industry is stable.”
“But pricing is just one part of the equation. What about discounting?”
“Well, it would appear to be similarly balanced. Asked about it, most respondents (48.6%) said it was no better/worse than normal while the balance was split exactly equally (25.7% on both sides) between getting worse and getting better.”
“Taken as a whole, price competition does not seem to be worsening in the fastener space at this stage.”
BB&TCM’s Fastener Distribution Index (FDI) fell to 46.8 in October, down from the 48.2 recorded in September.
“As in September, technically fastener distributors saw conditions worsen in October. But … we think the details offer a better picture.”
Most notably, the sales component improved, posting its second highest reading of the last five months. October’s sales index rose to 48.6 compared with 45.7 in September.
Customer inventories fell to 38.6 from 45.7 the previous month.
“This is not good, of course, but to the extent customers are culling inventories it sets the table for purchasing to improve once that process is complete.”
The six-month outlook rose slightly, with 34% of respondents anticipating higher activity in the near future, compared with 31% in September.
“Where there was a change was that respondents fled from the camp expecting lower results (14%, vs. 26% in September) to the “same” camp (51%, vs. 43% in September).”
“Thus, we continue to see results signaling stabilization of demand.”
For pricing, the sequential index was 50, suggesting no change from the previous two months. Annual pricing is still higher, but at a narrowing rate that the survey suggests is in the 0.5%-1.5% range.
“On the whole, there appears to be little impetus for fresh pricing in fasteners.”
The FDI is a monthly survey of North American fastener distributors. As a diffusion index, readings above 50 signal strength and below 50 signal weakness.
The FDI is a joint production of BB&T Capital Markets and the FCH Sourcing Network, the online network for industrial fasteners. ©2012 GlobalFastenerNews.com
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