John Wolz

The rate of cost increases held steady for a second straight year, with just over 65% of survey respondents reporting a moderate to strong rise in costs during 2007. The FIN Cost Index dropped to 3.6 from 3.8 the previous year. Costs were lowest in 2001, when the index dipped to 2.8 before soaring to 4.1 in 2004.
About two in 10 fastener companies found costs held steady in 2007, down from the 31% of firms reporting stable costs in 2006. Nearly 11% saw costs drop.

Fewer distributors reported cost hikes, with 60.8% seeing increases in 2007 compared with 72% the previous year. Just over 28% of distributors reported steady costs in 2007, while 10.8% claimed costs dropped. The distributor cost index was 3.5.
Distributors were more aligned in their forecast for 2008, with 58.7% anticipating costs will climb during the year. Nearly 30% expect a stable cost structure, and 9.9% see costs declining in 2008.
Eight in 10 manufacturers reported rising costs in 2007, compared with 55% in 2006. Only 15% reported flat cost structures in 2007, and 5% saw costs drop.
Over 67% of manufacturers are bracing for cost increases in 2008, while 25% think costs will stabilize this year.
More than 61% of importers reported cost hikes in 2007, while 15.4% saw steady costs and 23.1% claimed “moderate” cost declines. The importer cost index was 3.46.
For 2008 38.5% of importers think costs will climb, while an equal number expect costs to stabilize. More than 15% of importers predict cost declines. A majority of survey participants are prepared for rising costs in 2008, with 55.8% anticipating a “moderate” cost increase. About 26.5% claim costs will remain stable, and 9% of companies anticipate a cost decline. The projected overall cost index for 2008 is 3.5, up from the index of 3.4 forecast in 2007. \ �2008 FastenerNews.com