The seasonally adjusted November Fastener Distributor Index (58.2) ticked down vs. October’s 62.2 reading. In the November survey, just 34% of respondents indicated sales were “better” vs. 69% in October. This produced a seasonally adjusted sales index of 51.8 (October 73.4).

“The six-month average seasonally unadjusted sales index hit its lowest reading since early 2017,” according to R.W. Baird analyst David Manthey.

Pricing also continues to benefit top-line trends, with 84% seeing pricing gains vs. 77% in October. The resulting FDI pricing index of 90.8 rose slightly month to month.

“Regarding customer inventories, a majority of respondents view inventory levels as in line with expectations (84% of responses), while 11% believe customers’ inventories are too low. This compares to 81% in line and 19% too low last month,” Manthey wrote.

The Forward Looking Index decreased m/m, registering 52.5 in November vs. 57 last month – its lowest level since November 2016.

“This reflected a slight decline in the FDI employment index and less bullish respondent/customer inventory levels, partially offset by an uptick in the six-month outlook,” Manthey wrote. “At 52.5, the FLI suggests market conditions are likely to remain in growth mode, although we continue to believe the rate of growth may be stabilizing some in light of recent moderation in both the FLI and the FDI sales index.”

Manufacturing employment weakened during the month.

“Hiring sentiment was a touch less bullish among survey respondents this month. 29% of respondents saw higher employment levels in November relative to seasonal expectations vs. 35% in October, while 71% saw employment as in line (October 65%),” Manthey wrote.

The resulting FDI Employment Index was 64.5 vs. 67.3 last month.

Respondent commentary was mixed.

“The overall tone of qualitative commentary remained mixed this month, with favorable feedback on implications from recent trade developments offset by some unease regarding future economic conditions,” Manthey wrote.

One respondent commented: “The new agreement with Mexico and Canada will bring confidence. This weekend’s talks with China, delay of increased tariffs, and China’s promise to buy more from US will inject some enthusiasm into economy.”

Another participant said: “No immediate signs of slowing. November is traditionally lower than October, but still 30% above last year.”

Others were less enthusiastic.

“Some economic forecasts are predicting a slight downturn in 2019,” one participant wrote.

“The six-month outlook, however, continues to point to stable to higher activity levels anticipated by fastener distributors over the next six months, with 37% of respondents expecting higher activity levels, 45% expecting similar activity, and just 18% expecting lower activity,” Manthey wrote.

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