The Fastener Distributor Index (FDI) survey for December, 2023 retrenches below 50, climbing to 53.4 after two consecutive months of expansionary readings that left us incrementally positive on fastener market momentum, the FDI took a somewhat unexpected step back in December to 47.5.
Key Points:
FDI retrenches below 50. After two consecutive months of expansionary readings that left us incrementally positive on fastener market momentum, the FDI took a somewhat unexpected step back in December to 47.5 (from 53.4 last month). However, this could simply be normal seasonal slowing in December, as many participants suggested: “December is ALWAYS our worst month so the negative answers for month-to-month shouldn’t be taken too seriously. Our customers are mostly closed the last two weeks of the year and many of our vendors are closed the last week of the year. ” M/m deceleration in the FDI was driven by a significantly lower seasonally adjusted sales index (47.4 vs. 63.0 in November), the employment index (moderated to 50.0 from 55.9), and customer inventories (46.6 from 54.4). Just 24% of respondents indicated sales came in above seasonal expectations (November 35% and October 44%). Another 38% said sales were in line (consistent with last month), while 38% saw weaker sales than expected (November 26%).
FLI also slightly lower m/m. The FLI saw similar deceleration, coming in at 49.6 vs. 50.4 last month. Last month’s reading had marked the first growth reading for the index since July 2022. The m/m decline in December reflected softer employment levels and higher customer inventories, although the six-month outlook index did move higher off a soft month. On the outlook specifically, 55% of respondents predicted higher activity six months from now vs. today compared to 47% last month. The percentage anticipating similar activity was 31% compared to 29% in November, while the percentage expecting softer activity was just 14% (last month 24%). This drove the six-month outlook index to register 70.7 vs. 61.8 last month.
Read Full Report:
FDI_Report_December_2023
Listen to episode #196 of the Fully Threaded Radio podcast 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.
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