US Fastener Distributor Index Continues Rebound in Feb., Though Outlook Dips
Views :235 Recommendation: Votes:0 Discuss:0


FCH Sourcing Network’s monthly Fastener Distributor Index (FDI) gained more positive ground in February after January’s major rebound, though the index’ near-term outlook waned further amid fears of supply chain disruption tied to the ongoing coronavirus outbreak.

The FDI — operated by FCH in partnership with R.W. Baird — showed that February registered a seasonally-adjusted reading of 53.0, increasing 1.7 points from January.

Combined with January’s 6.7-point surge, the index has seen considerable recovery after a three-month slide that culminated with December showing the lowest reading in the FDI’s nine-year history at 44.4.

For the index, any reading above 50.0 indicates expansion, whereas anything below 50.0 indicates contraction.

The FDI's forward-looking-indicator (FLI) — which measures distributor respondents' expectations for future fastener market conditions — followed a healthy 4.7-point gain in January with a two-point fall in February to a contraction territory mark of 48.9. January was the FLI’s only expansion reading since April 2019.

R.W. Baird Analyst David Manthey, CFA, noted: “a noticeable uptick in respondents seeing slower deliveries from suppliers, coupled with respondent commentary suggests potential Corona virus-related supply chain disruption will be an area to closely monitor going forward.”
The FDI had been in expansion territory for 20 consecutive months before dipping to 48.3 this past June, recovering over the summer to a peak of 56.0 in September before declining each month since until January.

In February’s FDI, the seasonally-adjusted sales index increased 4.9 points to a mark of 54.9, following January’s 15.1-point surge. In other February metrics:

-- Employment decreased 8.5 points from January to 48.2;
--Supplier Deliveries increased 7.8 points from January to 66.1;
--Respondent Inventories increased 1.0 points from January to 64.3;
--Customer Inventories dipped 0.6 points from January to 41.1;
-- Month-to-Month pricing fell 8.3 points from January to 50.0; and
--Year-to-Year pricing fell 11.1 points from January to 58.9

“Potential early supply chain impacts from the Coronavirus most noticeably manifested in the form of a significant uptick in the percentage of respondents seeing slower supplier deliveries compared to last month,” Manthey noted.

The FDI's six-month outlook showed considerable fluctuation from December, with more respondents expecting higher and lower activity six months from now and drastically fewer respondents expecting activity to be the same. In February’s FDI:

--50 percent of respondents now expect higher activity six months from now (compared to 33 percent in January)

--18 percent of respondents expect similar activity six months from now (compared to 50 percent in Jan.)

--32 percent of respondents expect lower activity six months from now (compared to 17 percent in Jan.)'

Source: Industrial Distribution
 
2020-03-24

Recent Releted News

Vote for this news?
Discuss
More Discuss...
Your Name:
Enter the code shown: