FIN Survey: 2005 Sales & Profits Up; Price Increases Slow

John Wolz

Following a frantic year for price hikes, 2005 slowed a bit for the fastener industry, with just over 71% of survey participants raising prices an average of 11.5% in 2005, down from the 92% who hiked prices an average of 18.2% in 2004.
During the first six months of 2006, 50% of End of 2005 FIN / FastenerNews.com Survey participants plan to hike prices an average of 5.9%.
Sales and profits were strong, FIN”s 27th annual fastener industry survey found, despite mediocre predictions at the end of 2004.
“Although the results of the 2004 survey suggested that 2005 would not be a banner year, the FIN Current Company Performance Index remains unchanged at 7.5,” noted Tony Casilio of AWP Research. “A strong majority (81.9%) reported increased sales and nearly as many (78.7%) reported increased profits in 2005.”
However, widespread cost increases continued to dampen performance, Casilio found.
“Steel prices continue to plague manufacturers, with 64.3% reporting increases.”
But the rate of steel increases in 2005 was less than half of the reported steel hike the previous year.
For manufacturers, both operating capacity and inventory turns declined in 2005, though sales were seemingly robust.
Many distributors reported more inventory turns and a growing bottom line that saw “significant” improvement for nearly one-third of distributors.
Confidence in the U.S. Congress on business issues is at the lowest point in the nine years it has been measured in the FIN Survey, and confidence in the White House fell to its lowest point in the current presidency.
Among the indicators for 2006, majorities of fastener companies anticipate increasing capital expenditures, plan pay raises and expect sales and profits to improve again. Most do not expect to add employees. \ �2006 FastenerNews.com