9/9/2016
NEWS BRIEFS
Report: August FDI “Bounces Back”
The seasonally adjusted Fastener Distributor Index reading for August (53.1) proved “materially higher, as overall results bounced back nicely from a notably weak July,” wrote independent analyst Charles Redding.
August sales led the sequential improvement, with 68% of respondents noting flat or stronger selling conditions versus the preceding month.
“Overall conditions remain choppy for many fastener distributors, in our view,” Redding noted. “Nonetheless, we believe the stronger August results are encouraging, particularly given prior industry warnings for extended customer shutdowns.”
August FDI bounces back nicely. The seasonally adjusted August FDI (53.1) improved materially versus an abnormally weak July reading (45.9), with “top-line sentiment remain(ing) the most compelling indicator in the Index.”
For August, 68% of respondents cited unchanged/ stronger sales versus the July period (just 39% last month). The stronger August results were “more reflective of prior index momentum in the May (50.1) and June (50.6) readings.”
Regarding customer inventories, 23% of participants viewed current levels as “too high.”
Manufacturing employment outlook still mixed. “We believe the weaker US jobs report for August (+151K adds vs. +180K consensus; unemployment 4.8%), reflects mixed hiring conditions for many domestic manufacturers (US BLS).
Nine in ten survey respondents cited unchanged (or weaker) hiring conditions versus the prior month. This metric averaged 87% over the prior six-month period.
August sentiment implies early optimism. “August more than made up for a weak July,” one participant noted. Another attributed nascent improvement to ongoing strength in residential construction.
“This has been a dry summer, but (there are) some positive signs. Housing is strong and, as such some- not a lot- of light duty equipment markets are picking up.”
The FDI is a monthly survey of North American fastener distributors, conducted with the FCH Sourcing Network and the National Fastener Distributors Association.
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