The seasonally adjusted November Fastener Distributor Index (57.6) saw a modest improvement vs. December (56.1) “as better seasonally adjusted sales trends offset slightly weaker employment levels,” according to R.W. Baird analyst David Manthey.

Pricing remained stable sequentially, with the FDI Pricing indexes “mostly unchanged.” 

“While past commentary focused on freight delays, container shortages, and shortages of imported material, labor seemed to be the biggest irritant this month, cited by nearly all respondents,” Manthey writes.

The seasonally adjusted Forward Looking Index came in at 64, contracting for the third consecutive month. 

“The FLI has been on a gradual downward descent since June as supply chain issues and labor challenges led to less rosy forecasts of future activity,” Manthey writes. “The FLI was pressured this month by lower employment levels and a slightly less positive six-month outlook for participants.” 

The six-month outlook reflects just 36% of respondents anticipating higher activity levels over the next six months – down significantly from 80% in February and March 2021. 

“That said, product shortages in the face of continued strong demand could simply lengthen out the cycle, resulting in the FDI remaining nicely in growth territory for some time to come.”

The FDI employment index declined to 63.6 from 65.2 last month. Multiple respondents indicated hiring remains challenging despite significant efforts. 

“Hiring is tougher than ever, with very little replies on Help Wanted ads,” one participant summarized.

Supply chain disruptions and “acute labor headwinds” continue.

“Still having delayed deliveries with both overseas and domestic product,” said one respondent. “Customers still not too encouraged in increasing our sales due to uncertainty in the market and inability to get other product to continue production on a daily basis!” 

Labor challenges were more prevalent and more impactful in November than in prior months. 

“A disappointing month due to limited human labor …. We’ll be back up to full speed in December,” one participant noted. 

Lastly, one participant noted supplier price increases continue “due to material shortage, labor shortage and delayed shipments from raw material suppliers.” 

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