The Fastener Distributor Index for September dipped slightly to 61.5, “with sales trends remaining very strong,” writes R.W. Baird analyst David Manthey.

“In the September survey, 57% of respondents indicated sales were ‘better’ relative to seasonal expectations, moderating vs. August levels of 70% but still well above 2016 average levels (31%).”

September’s sales index was 77.3, “suggest(ing) selling conditions remain very healthy overall.”

“Sales this year in September were better… [y/y] by 12%,” one distributor noted.

However, pricing was again “a solid tailwind for the third consecutive month as 71% of distributors saw prices rise y/y,” Manthey writes.

This produced an FDI pricing index of 83.9 – surpassing last month’s 78.8 reading and reaching levels not seen in over two years, according to Manthey.

About 54% of respondents reported inventory levels were “relatively in line with expectations, while 36% see inventory levels as too low.”

Hiring sentiment decelerated slightly, with 25% of respondents indicating employment was higher in September relative to seasonal expectations vs. 30% in August, while 64% saw hiring levels as in line with seasonal expectations.

“Of note, hiring for several respondents may have been placed on hold amid last month’s hurricanes as at least one respondent indicated operations were disrupted for several days due to the recent storms.”

September’s Forward-Looking Indicator accelerated to 66.9 vs. 59.9 in August, marking a YTD high.

“The Forward-Looking Indicator averaged 49.7 during 2016, but has averaged 61.6 year-to-date in 2017. Given solidly expansionary FDI and Forward-Looking Indicator readings, market conditions appear likely to remain in growth mode in the coming months.”

The outlook over the next six months remains positive, with 64% of respondents expecting higher activity levels over the next six months, up from 45% in August.

“In addition, zero respondents anticipate lower activity levels over the next six months – the first time since late 2013 and just the second time in survey history that has occurred.”

The FDI is a monthly survey of North American fastener distributors, conducted with the FCH Sourcing Network and the National Fastener Distributors Association. Web: fdisurvey.com