John Wolz

Fastener manufacturers reported raw material prices in 2007 rose to their second-highest level in the last decade. More than three-fourths of manufacturers anticipate raw material price increases in 2008.
The FIN Raw Material Price Index rose to 3.95 in 2007, well above the 3.6 reported the year before and the 3.8 recorded in 2005. However, 2004 still stands as the height of price volatility, when the index topped 4.7.
A 75% majority reported raw material price increases. Roughly 20% of manufacturers participating in the survey saw prices stabilize, and only 2.5% experienced a price decrease, compared with 18.5% who reported price declines in 2006.
Manufacturers are expecting raw material prices to flatten in 2008, pegging their outlook at 3.9. A total of 67.5% expect “moderate” price hikes, and 10% predict “strong” increases. Only 17.5% foresee prices holding steady, while 2.5% anticipate price cuts.
The FIN Raw Material Inventory Index climbed to 3.2 in 2007, besting the 3.1 achieved the previous year. The index high of 3.7 was set in 2004, and the low was 2.6 reached in 1998 and repeated in 2001.
An overwhelming 85% of manufacturers reported steel price increases in 2007, while 7.5% found steel prices remained flat, and only 5% saw prices drop. The average increase for 2007 was 11.4%, down from the 16.2% reported in 2006.
Finished goods on hand again rated 3.2. The 10-year high was 3.5 at the end of 2004, and the low was 2.6 for 2001.
About one-third of manufacturers saw their raw material inventory remain stable, while 40% recorded inventory increases and 25% lowered their inventory in 2007.
A slight 50% majority reported difficulty obtaining raw materials during the year, compared with 47.5% of manufacturers who experienced no difficulty obtaining materials.
Inventory turnovers for manufacturers slipped a third straight year to a new low of 4.4 from 4.9 in 2006. The range for 2007 was from less than one to more than 10.
Average operating capacity rose for the third straight year, reaching 74% in 2007 after finishing at 70.2% in 2006. Manu-facturers anticipate increasing operating capacity in the coming year to 77.57%, approaching a level not seen since the 1990s.
More than three-quarters (77.5%) of manufacturers were able to raise their selling prices in 2007, just off the 77.8% pace the year before. None acknowledged cutting prices, and 17.5% left prices unchanged. \ �2008 FastenerNews.com