Global Fastener News

Perspective: When the Chips Are Down

Sarah Beaumont

Editor�s Note: The following is presented by UK-based Fastener & Fixing Europe magazine as part of a news column exchange with FIN.
By Sarah Beaumont, Editor
Fastener & Fixing Europe

Anyone reading the economic gloom and doom in the international media will be in the throws of accumulating enough food for a 30-year stand-off. But is global recession really just around the corner?
In the UK, retail spending is buoyant, a good indication of people�s attitudes, and the housing market is still booming, which of course goes some way to fueling the construction sector. It doesn�t help confidence, however, when one reads statistics like those issued in a recent European Commission survey reporting that the Euro-area economy fell in June for the sixth month in a row, with some economists fearing that Germany is on the brink of recession. How relevant are these facts to fastener production and sales?
The figures are indeed heavily influenced by the actions of telecom companies and the hi-tech sector and therefore will have variable impact on fastener and fixing suppliers.
The likes of Compaq, Nokia and Ericsson � to name but a few�� have all announced cuts, and this will be bound to affect fastener companies supplying these areas. European technology giant Siemens shed 8,000 jobs this year already, due to poor performance in its telecom businesses.
However, on the other side of the coin, their automation division, transport systems and power generation businesses are doing very well. This is typical.
What does seem to be the biggest threat, as it has been for the last four years or so, is crazy discounting, which is rife and could easily destroy the UK market and filter through. It is not in the interests of distributors to devalue their own stock unless their aims are ultimate destruction of the industry of which they are a part.
Having said that, there is still much expansion through growth and acquisition in the fastener industry.
Lepore at EIFI: Canadian Exports Down
The European Industrial Fasteners Institute (EIFI) drew nearly 100 delegates and guests from Europe, North America and Japan to its June meeting in Berlin.
David Lepore, past president of North America�s Industrial Fasteners Institute, told the EIFI that the volume and value of fasteners from Canada exported to the U.S. had dropped off dramatically.
Lepore, president of Robertson Inc. and Pan American Screw, described U.S. automotive sales as still relatively strong, but the truck industry in bad shape.
U.S. income tax reductions could give some slight impetus to the economy, but all markets in general had seen a drastic reduction in business, Lepore said.
Although steel prices remained stable, more and more steel manufacturers were being forced into receivorship.
While the dollar remained strong, it was increasingly under inflationary pressures, and it had been forecast, perhaps optimistically, that it would be the fourth quarter of the year before the situation stabilizes. The U.S. fastener industry had excess capacity, with a high level of slow-moving stocks, and would probably stay that way for the balance of 2001, Lepore predicted.
Yoshiaki Fujimoto, former president of the Fasteners Institute in Japan, indicated that the Japanese economy is still sluggish despite the large-scale economic measures implemented by the government.
Despite these prevailing circumstances, production in the Japanese fastener industry for 2000 increased by 6.4% in value and by 7.0% in volume. Exports from Japan increased by 128 billion yen (12%) and imports by 30 billion yen (10%).
Dr. Florian Seidl, chairman of the European Fastener Distributors Association (EFDA), welcomed the opportunity to address the meeting and strengthen the good relationship that had been built up between manufacturers and distributors in the last few years.
Francesco Venturini, Heinz Storch and Bernard Maurin from the distribution industries in Italy, UK and France, respectively, all supported Seidl, making their contribution to the numerous discussions that took place during the Assembly.\
�2001 FastenerNews.com