The Fastener Distributor Index (FDI) improved to 59.6 in July vs. June (55.8), driven by slightly better selling conditions. 

“Pricing is accelerating with seemingly no end in sight (at the moment) amid rapid steel/raw material inflation,” according to R.W. Baird analyst David Manthey.

This drove the FDI pricing index to an all-time high. 

“In addition to extended lead times, labor shortages, and freight delays impacting respondents’ ability to meet orders, several respondents also commented on the ongoing semiconductor chip shortage for the first time this month, as this seems to now be filtering down to impact fastener market demand,” Manthey wrote.

The Forward Looking Index moderated to 65.3 in July, retrenching for the fourth consecutive month All four FLI components (employment index, respondent inventory levels, customer inventory levels, and six-month outlook) softened during the month.

The FDI employment index declined to 61.3 vs. 62.9 in June, with 26% of respondents reporting employment levels as above seasonal expectations, down from 35% the previous month. 

“We believe this reflects continued challenges in finding/retaining qualified labor amid a strong job market and enhanced federal/state unemployment benefits, although the latter factor could disappear in September as enhanced federal unemployment benefits expire,” Manthey wrote.

Labor and logistics constraints were most respondents’ top concerns in July. 

“Biggest obstacle right now is the worldwide logistics backlog,” noted one respondent. “Booked sales and additional sales opportunities are growing, they’re just difficult to fulfill.” 

“Pricing is out of control,” another respondent stated. “Supply is short. Lead times unbearable. Customers not all [understanding].” 

A new growing concern evident this month was the ongoing semiconductor chip shortage.

“Customer demands are [down] due to chip shortages, import delivery delays and lack of labor force.” 

Some respondents continue to fare quite well in this environment. 

“We’ve experienced four straight months of records sales for our company,” a respondent commented. 

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