The Fastener Distributor Index (FDI) survey for June, 2024 dipped very slightly but remained in positive territory coming in at 52.1 after reading 52.9 in May, seasonally adjusted. Likewise, the Forward Looking Indicator (FLI) dropped to 50.9.
 
Key Takeaway:
The seasonally adjusted Fastener Distributor Index (FDI) saw a slight m/m decline, 52.1 vs. 52.9 in May, but remained in expansionary territory (>50). Commentary was mixed as some saw good order trends, while others characterized June as fairly weak. Looking ahead, this month’s Forward-Looking Indicator (FLI) also slightly weakened vs. last month and remains just barely above the Mendoza line (50) at 50.9, although outlook commentary leaned net positive. When taken together with other indicators (recent FAST monthly sales, May/June ISM PMI), we believe fastener market conditions remain fairly soft, with June slightly worse in aggregate than May.
 
FDI slightly softer m/m. The June seasonally adjusted FDI declined to a reading of 52.1 compared to 52.9 in May. Three of the four underlying components (sales, employment, and customer inventories) decelerated vs. May; only the supplier deliveries index improved by a very modest amount. Looking at the sales index specifically, just 29% of respondents indicated sales came in above seasonal expectations – slightly lower vs. 36% last month and below the 33% average over the past year. 26% indicated sales were below expectations compared to 27% last month, while the remaining 45% said sales matched expectations (vs. 36% in May).
 
FLI also slightly weaker but remains above 50. Consistent with the FDI, the FLI also suggests improvement is expected ahead, albeit at a decelerating rate. Versus last month, the FLI decreased to 50.9 (May 52.8), but at above 50.0, continues to signal an expectation for expansion in future market activity levels. While slightly leaner customer inventory levels and a more optimistic six-month outlook were positives this month, the FLI decelerated based on higher respondent inventories and weaker employment levels. On the outlook specifically, views again leaned net more positive than negative (45% expecting higher activity levels six months from now vs. today compared to 19% lower). Importantly, the 45% expecting higher activity now represents the plurality of respondents, with the remaining 35% of respondents forecasting similar trends. In May, 39% expected higher activity, 42% similar, and 18% lower. This drove the six-month outlook index to improve to 62.9 from 60.6 this month.
 
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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 202 of Fully Threaded Radio for further commentary.

 
Please share the FDI with your fellow North American fastener distributors and encourage them to participate: www.fastenersclearinghouse.com/fch/main.nsf/fFastenerDistributorIndex

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