Jason Sandefur

After nearing the record level achieved in 2000, distributor inventory turnovers declined in 2008, settling at 4.1 compared with an average of 4.64 the previous year.
Nearly 58% of distributors experienced cost increases in 2008 about the same as the previous year. Just under 27% reported steady costs, while 14.1% saw costs drop. The distributor cost index increased to 3.6 in 2008 from 3.5 the previous year.
Margins diminished in 2008, down from the record high of 41.12 recorded in 2007. The FIN Gross Margin Index dropped to 37.7%.
More distributors were able to pass costs on to customers through price increases. More than 87% raised prices an average of 13.9% in 2008, compared with 80% who raised prices an average of 9% in 2007. About 9% maintained current pricing during the year, while 3.8% reported price cuts.
After two years of price gains, nearly four in 10 distributors plan to lower prices an average of 3.6% in the next six months. More than 30% of distributors in the FIN Survey think prices will remain flat through mid-2009. Just over 21% foresee price hikes in the coming months, hampered by growing doubts of a quick economic recovery.
The FIN Survey found fasteners predominately available during 2008. For a fourth straight year the percentage of distributors claiming problems with fastener availability dropped. Only 35.9% reported “some” or “significant” sourcing problems this year, down from the 41.3% who experienced problems the previous year. A 64.1% majority of distributors had no problem obtaining fasteners. �2009 FastenerNews.com