The Fastener Distributor Index (FDI) survey for November, 2023 continued its rebound last month, climbing to 53.4 after reading 52.6 in October, seasonally adjusted. Following suit, the Forward Looking Indicator (FLI) finally inched above the 50 mark for the first time this year, rising to 50.4.
Key Takeaway:
The seasonally adjusted Fastener Distributor Index (FDI) improved m/m and remained above a neutral 50 reading for the second consecutive month, reading 53.4. Comments skewed noticeably more positive this month with many expressing that they are seeing good bookings momentum and feeling growing optimism. The Forward-Looking Indicator (FLI) also improved m/m and finally reached above 50 for the first time since July 2022, reading 50.4. Overall, we view the November FDI/FLI as perhaps indicative of a true stabilization and recovery in fastener markets for the first time in quite a while.
Key Points:
FDI above 50 for two consecutive months. The seasonally adjusted November FDI (53.4) improved from last month (52.6) and marked the second consecutive month of growth (>50). While the FDI has registered a handful of growth readings throughout 2023, the last time the index posted two consecutive >50 readings was June 2022 – perhaps suggesting a real change in underlying demand trends rather than another head fake or anomaly. M/m growth was driven by an improved seasonally adjusted sales index (63.0 vs. 52.6 last month), the employment index (improved to 55.9 from 51.6), and customer inventories (54.4 from 51.6 in October). Respondents indicated they saw growth in bookings and strong daily sales numbers: “I was very surprised this month as daily sales numbers added up more quickly than usual. Nice result.” 35% of respondents indicated sales came in above seasonal expectations (October 44%). Another 38% said sales were in line (22% last month), while just 26% saw weaker sales than
expected (October 34% and 2023 YTD average 39%).
FLI breaks through to growth. The FLI also saw sequential improvement, coming in at 50.4 vs. 47.1 last month. The FLI had gradually climbed towards 50 from a low of 37.8 in April, but this month marked the first growth reading for the index since July 2022. Higher employment levels and a significantly more positive six-month outlook drove the improvement. On the outlook specifically, 47% of respondents predicted higher activity six months from now vs. today compared to just 25% last month. The percentage anticipating similar activity was 29% compared to 47% in October, while the percentage expecting softer activity was 24% (last month 28%). This drove the six-month outlook index to register 61.8 vs. 48.4 last month.
Read full report:
FDI_Report_November_2023
Listen to episode #195 of the Fully Threaded Radio podcast for further commentary.
We 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.
– Fastener News Desk
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.
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