The Fastener Distributor Index (FDI) survey for March, 2025 gained slightly with a reading of 52.6, after its 51.6 mark in February, seasonally adjusted. The Forward Looking Indicator (FLI) slid further, impacted by ongoing tariff chaos, dropping modestly to 47.0.
Key Takeaway:
The seasonally adjusted Fastener Distributor Index (FDI) improved slightly for the second consecutive month, reaching 52.6. However, the Forward-Looking Indicator (FLI) continued to moderate, slipping to 47.0, as tariff/trade war headlines continue to dominate the news cycle and lead to anxiety over rising recession risk. Overall, the FDI suggests trends in the fastener market have slightly improved in recent months, but the FLI could suggest that improvement turns out to be short lived.
Key Points:
FDI slightly improved m/m. The March seasonally adjusted FDI improved to 52.6 from February’s 51.6. While tariffs are causing a lot of uncertainty regarding the outlook and hesitancy in customer buying patterns, March trends showed signs of improvement for most respondents. 50% of respondents said sales came in above seasonal expectations this month, which is the highest percentage since March 2022 and up nicely from 40% in February and 27% in January. Employment remained steady, with fully 72% of responses saying employment levels were similar month over month. Pricing, meanwhile, has ratcheted significantly higher over the past two months as steel/Chinese tariffs took hold. A majority (61%) of respondents this month said pricing was higher vs. last month, which follows 48% in February and just 17% in January. This drove the FDI Pricing Index to record the highest reading since early 2022.
FLI continues to slide as pessimism mounts from trade war. The FLI slipped further below 50 this month, coming in at 47.0 (February 47.3). Respondent commentary points to a great deal of uncertainty among customers, hesitant buying patterns, and internal/external conversations that are almost exclusively focused on tariffs rather than growth. Quantitatively, the six-month outlook continued its recent slide as just 44% of participants forecast better activity levels over the next six months vs. today – unchanged vs. last month but continuing to move lower since December when optimism had reigned (61% expected improvement at that time). Another 22% see similar trends continuing (down vs. 24% in February and 33% in January), while 33% forecast deteriorating sales (vs. 32% last month). Several respondents commented that industrial market trends seemed to be finding a bottom just prior to the latest round of tariff news (“Liberation Day”), which could quickly erase this momentum. The March ISM PMI reversal to 49 after two consecutive >50 readings also suggest some slowing in momentum after an encouraging start to the year.
Tariffs the dominant news of this month’s survey. Nearly all commentary was focused on tariffs. Several comments indicated that tariffs are leading to uneven customer buying patterns: “After an initial rush to stuff inventory before the Trump Tariffs, most customers are now backing off. They all seem to hate the tariffs (rightly so) and are going to run out inventories before reordering.” Similarly, another participant said, “Many customers [are] holding on orders due to tariffs. They have communicated that they are waiting in hopes that countries will negotiate, and the tariffs will be lower or eliminated in the coming weeks.” Additionally, many respondents were dismayed to be spending the vast majority of their time focused on tariffs rather than growing their own businesses or help customers grow: “ Tariff wars [are] killing all our time, more meetings in a month than the past 5 years”; “I think we would all be happy working with customers on fastener requirements rather than spending time addressing tariffs.” Price increases are already starting to flow through as a result: “North American pricing increases are primarily due to tariffs not higher cost of goods.” Similarly, “Pricing would be trending about the same absent of tariffs.” If a near-term negotiated tariff resolution can be reached, however, some participants still see reasons to be optimistic about the future: “If not for the tariff turmoil, I would have interpreted March activity and results as proof that the industrial market cycle had bottom out and was building momentum for the remainder of the year. Instead, I selected ‘same’ for my answer on future activity… selecting ‘lower’ just felt wrong even though it very well could be right.”
FDI_Report_March_2025
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 #213 of Fully Threaded Radio for further commentary and analysis.
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