The seasonally adjusted Fastener Distributor Index (FDI) for April 2024 slightly decelerated m/m but remained in growth territory reading 51.6.
Commentary was more mixed this month as some see pockets of significant weakness (construction, OEM, Western US markets), while others see strength (strong manufacturing and domestic/international demand). This month’s Forward-Looking Indicator (FLI), meanwhile, improved vs. last month and reached a neutral 50. When taken together with other indicators (FAST, ISM PMI), we believe market conditions in April showed improvement vs. March but remain sluggish overall.
Key Points:
FDI remains above 50 but cools off slightly m/m. After three consecutive months of improvement, the seasonally adjusted FDI dipped a bit in April to 51.6 (March 53.0). Most of the four components of the index were weaker (sales and supplier deliveries) or flat (customer inventories) m/m; only the employment index improved. Looking at the sales index specifically, 47% of respondents indicated sales came in above seasonal expectations – improving vs. 40% last month and exceeding the 31% average over the past year. However, 33% indicated sales were below expectations compared to just 13% last month, which drove the reduction in the overall sales index. The remaining 20% said sales matched expectations (vs. 47% in March).
FLI returns to neutral level. After a couple consecutive sub-50 readings, the FLI this month bounced back to a neutral level at 50.0. Higher employment levels, leaner customer inventories, and a more bullish six month outlook drove the m/m improvement. On the outlook specifically, views leaned more positive than negative (33% expecting higher activity levels six months from now vs. today compared to 23% lower), but the plurality of respondents see similar activity continuing (43%). In March, views were exactly split (1/3 higher, 1/3 same, 1/3 lower). This drove the six-month outlook index to improve to 55.0 from 50.0.
READ THE FULL REPORT:
FDI_Report_April_2024
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). 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. 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 #200 of Fully Threaded Radio for further commentary.
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Fastener Distributor, Fastener Distributor Index, Fastener Industry, Fastener News, Fastener News Podcast
