Global Fastener News

• Fastener Distributor Index dipped to 56.5, reflecting deceleration in employment and customer inventories amid improved sales
• Forward-Looking Indicator rose to 52.6, suggesting optimism
• Fastener market conditions “continue to remain soft near term”
• Employment levels moderate
• Pricing “noticeably” lower

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The seasonally adjusted Fastener Distributor Index (FDI) showed slower growth in October, dropping to 56.5 from September’s 59.

Two of four underlying factors (sales and supplier deliveries) improved in October. Employment moderated without dropping below 50, while customer inventories declined (sub-50 reading).

“Despite the m/m moderation, October’s FDI reading still meaningfully marks the second highest monthly FDI reading in 2024,” wrote R.W. Baird analyst David Manthey (CFA) with Quinn Fredrickson (CFA).

The sales index increased to 61.8 in October (September 58.4), signaling improved momentum. Nearly half of respondents (43%) reported sales above seasonal expectations, which is higher than the 36% average registered over the past year. Employment levels moderated to 51.7, a step down from last month’s 55.4 reading. Year-to-year pricing also “noticeably lowered,” reaching 56.7 compared to 62.5 in September.

The Forward Looking Index climbed to 52.6 in October (September 50.5), suggesting an “optimistic forward view for November among respondents.” This positive shift was driven primarily by a stronger six-month outlook, as well as lower inventory levels.

One in two survey participants anticipate increased activity in the coming six months, up from 39% in September. Conversely, concerns about lower activity in the coming months decreased, with only 17% of respondents expressing this sentiment compared to 25% in September.

“This suggests that although some caution persists due to ongoing macroeconomic uncertainties, overall sentiment is becoming more positive. 33% of participants expect activity levels to remain stable.”

This caused the six-month outlook index to jump to 66.7 compared to 57.1 last month. “Considering the current length of the ISM downcycle/downbeat fastener market conditions, future rate cuts, and post-election acceleration, we believe this month’s optimism regarding a turn in conditions ahead could be merited.”

Respondent commentary leaned positive.

“October was a strong month for sales, with a respondent reporting a ‘near-record month of sales,’ driven by both higher prices and volume,” wrote Manthey. “Many noted improvements in the supply chain, with delays easing as ‘problems with overseas product [are] starting to ease with the railyards finally clearing out and the shipyard strike resolved’.”

Disruptions continued, particularly at the L.A. port, where “container deliveries have jumped to 10 weeks.”

The election brought a mix of caution and frustration amid a seasonal slowdown that started earlier than usual.
“This year is worse because everyone is waiting to see which idiot wins the presidential election,” one respondent stated.

Concerns over potential tariffs also affected outlooks.

“Most Americans don’t seem to realize we (the buyers) pay tariffs, not the seller.”

Fastenal reported October daily sales growth of 2.8%. Fastener sales declined 2% y/y, better vs. September’s -3.3% — marking the 18th consecutive month of either flat or declining y/y fastener sales.

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: fdi.com