FDI Sees ‘Sluggish-But-Positive Growth’
7/11/2013 1:56:00 AM
FEATURE
The BB&T Capital Markets Fastener Distributor Index (FDI) edged down to 51.3 in June from 52.4 in May.
“As in the last few months, the FDI changed technically (worse) but not substantively. June’s 51.3 was a bit worse than May’s 52.4, but that continues to point to sluggish-but-positive growth.”
The lower figure in June was driven by sales (50, vs. 63.9 in May), where those with better-than-expected results matched those with worse. This was only partly offset by supplier deliveries, which slowed (60.7, vs. 51.4 in May). Customer inventories remain low.
“Substantively, June feels similar to May (which felt similar to April which felt similar to March).”
The YTD average for the FDI is 52.3, which is representative of limited growth.
“There is not much going on in fastener distribution.”
Outlook: apathy settles in. In June, the ratio of respondents that were optimistic declined (28.6%, vs. 47.2% in May).
“This still hugely outnumbers the ratio of those that were pessimistic (14.3%, vs.16.7% in May). The outlook component is still on-balance favorable about the next six months.”
“What was notable in June was the apathy: with many optimists in May are now seeing no change over six months, those answering “Same” were 57% of the sample, the highest we have seen.”
Price: any gains were held, but not built on. Positive pricing signals reversed in June, with those reporting sequential gains slipping (48.2, vs. 56.9 in May).
“If there was an early year push to capture a bit of pricing, it seems to have run its course. Conversely, it seems to have stuck: those with positive annual pricing remain high (58.9, vs. 65.3 in May), and the increase remained in a 1%-2% range.”
“In all likelihood we have seen an early-year window to enact some annual price hikes, and those appear to have stuck. But the overall pricing environment remains tepid.”
The FDI is a monthly survey of North American fastener distributors. As a diffusion index, readings above 50 signal strength and below 50 signal weakness.
The FDI is a joint production of BB&T Capital Markets and the FCH Sourcing Network, the online network for industrial fasteners. ©2013 GlobalFastenerNews.com
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