John Wolz

Distributor inventory turnovers bounced back in 2007, nearing the record level achieved in 2000. Inventory turns rose to an average of 4.64 compared with 3.9 the previous year.
Over 60% of distributors experienced cost increases in 2007 compared with 72% the year before. Just over 28% of distributors reported steady costs, while 10.8% saw costs drop. The distributor cost index declined to 3.5 in 2007, down from 3.9 the previous year.
Margins improved in 2007 to their highest levels since FIN started tracking the figure in 1994. The FIN Gross Margin Index increased to 41.1 compared with 38.7% in 2006. The previous record level of 40.9 was set in 1999.
More distributors were able to pass costs on to customers through price increases. About 80% raised prices an average of 9% in 2007, compared with 72.5% of distributors who achieved an average price hike of 7.1% in 2006. Just over 17% maintained current pricing during the year, while 2.2% reported price cuts.
Nearly 74% of distributors plan to raise prices an average of 6.7% in the next six months, up from the 51.7% majority who predicted price gains during the first six months of 2007. Just under 20% of distributors in the FIN Survey think prices will remain flat through mid-2008.
The FIN Survey found fasteners predominately available during 2007. For a third straight year the percentage of distributors claiming problems with fastener availability dropped. Only 41.3% reported “some” or “significant” sourcing problems this year, down from the 59% who experienced problems the previous year. A 54.3% majority of distributors had no problem obtaining the fasteners they needed. \ �2008 FastenerNews.com