Source: Baird, FCH Sourcing Network, company reports


The seasonally-adjusted Fastener Distributor Index (56.5) was unchanged in January after declining for the last two months of 2018.

Meanwhile the January sales index improved modestly to 62.2 as compared to 58.1 in December, indicating selling conditions are improving.

The pricing index moderated.

“Customer inventory levels were in line with expectations and consistent with December levels,” according to R.W. Baird analyst David Manthey. “Interestingly, respondents indicating inventory levels were “too high” was the highest since September 2016.”

The Forward Looking Index decreased to 49.8 from December’s 54.1, “driven by a weaker employment reading and slightly higher inventory levels among respondents,” Manthey writes.

“With this month’s FLI the first sub-50 reading in over two years (but very close to a neutral 50.0 reading), we are hesitant to call for an imminent downturn and still expect growth in 2019. That being said, we believe stabilization or further moderation in the rate of growth remains more likely than acceleration from here.”

Hiring sentiment was lower in January, with employment levels characterized as in line or lower than seasonal expectations.

Commentary “skewed more positive than negative this month.” Several respondents expressed “cautious optimism” for a potential resolution to the US-China trade dispute.

“Stay tuned. China and the USA will soon be playing nice again.”

Pending any resolution, however, tariffs continue to impact lead times and pricing.

“Tariffs from China are affecting increased costs and an influx of incoming material is delaying shipment at the ports!”

“Uncertain about looking too far ahead,” another respondent commented. “Economists forecast a less robust growth year, however, January was better than anticipated.”

“The six-month outlook points to stable to higher activity levels anticipated by fastener distributors over the next six months, with 41% of respondents expecting higher activity levels, 37% expecting similar activity, and 22% expecting lower activity,” 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