The Fastener Distributor Index (FDI) survey for February, 2024.  The FDI crept into growth territory with a reading of 50.5 up from 49.7 in January, seasonally adjusted. The Forward Looking Indicator (FLI) took the opposite course, dropping slightly to 47.9.

Key Takeaway:
The seasonally adjusted Fastener Distributor Index (FDI) bounced back to growth (>50) in February with a reading of 50.5. A key theme present among respondent commentary was stabilization/consistency in demand. After accurately forecasting the rebound in this month’s FDI, the Forward-Looking Indicator (FLI) slightly retrenched, dipping to 47.9, implying some deceleration ahead. Overall, while the headline FDI showed some moderate m/m improvement, our key takeaway is that conditions were fairly steady in February. Notably, however, the stable to slight improvement in demand conditions seen over the past five months is a marked improvement from the decelerating environment seen by participants throughout much of 2023.

Key Points:
FDI back just slightly above 50. Following solid m/m improvement in January, the FDI saw further modest sequential improvement in February, reaching a level just above the neutral 50 reading and indicating growth (50.5). However, when looking at the underlying drivers, the FDI paints a slightly more mixed picture as three of the four components (sales, employment and customer inventories) were stable to lower m/m. Only the supplier deliveries index saw a m/m improvement, which drove the overall m/m improvement in the headline FDI. Looking at the sales index specifically, 31% of respondents indicated sales came in above seasonal expectations which was down vs. 44% in January but essentially matched the 30% average over the past year. Another 31% said sales were in line (41% in January), while 38% saw weaker sales than expected which was a sizable increase relative to just 15% last month.

FLI reverts to sub-50. The FLI also somewhat balanced out the headline strength seen in the overall FDI as the FLI retrenched below 50 to 47.9 (January 50.4), indicating likely contracting momentum ahead. The m/m deceleration in the FLI reflected higher inventory levels for respondents and a lower six-month outlook. On the outlook specifically, 47% of respondents predicted higher activity six months from now vs. today compared to 54% last month. The percentage anticipating similar activity was 34% compared to 36% in January, while the percentage expecting softer activity was 19% (last month 10%). This drove the six-month outlook index to register a reading of 64.1 vs. 71.8 last month.



Listen to episode #198 of Fully Threaded Radio for further commentary.

Fastener News Desk encourages all North American fastener distributors to take part in the FDI Monthly Survey.

If you are interested in being a more active part of the fastener industry, you can apply to add your company to the FDI survey group. Complete the Request an Invitation to Participate” form by clicking here. Once verified, you will receive login ID and password information and you will be notified by email every month when the survey period has been opened.

About the Fastener Distributor Index (FDI).

The Fastener Distributor Index (FDI) was developed as a service to the fastener industry by the FCH Sourcing Network in 2012 to be a new benchmark for the fastener industry. The FDI is a monthly survey of North American fastener distributors, conducted with the FCH Sourcing Network and Baird. It offers insights into current fastener industry trends/outlooks. Similarly, the Forward-Looking Indicator (FLI) is based on a weighted average of four forward-looking inputs from the FDI survey. This indicator is designed to provide directional perspective on future expectations for fastener market conditions. As diffusion indexes, values above 50.0 signal strength, while readings below 50.0 signal weakness. Over time, results should be directly relevant to Fastenal (FAST) and broadly relevant to other industrial distributors such as W.W. Grainger (GWW) and MSC Industrial (MSM).

The FDI Survey website is a resource than can be accessed by anyone, but it can only be updated by registered users during the monthly open survey period, which occurs during the last week of each month.

Listen to episode #198 of Fully Threaded Radio for further commentary.


Fastener Distributor Index (FDI) | January 2024


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