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FALL 2022

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Distributor's Link Magazine Summer 2022 / Vol 45 No 4

44 THE DISTRIBUTOR’S

44 THE DISTRIBUTOR’S LINK FCH SOURCING NETWORK Sourcing Network for the Fastener Industry TEL 1-877-332-7836 EMAIL eric@fastenersclearinghouse.com WEB www.fastenersclearinghouse.com EXPLAINING THE MYSTERY OF THE SAGGING FDI by Eric Dudas Why are distributors so optimistic as the leading indicator sinks? The Fastener Distributor Index (FDI) tanked dramatically last month while the Forward Looking Indicator (FLI) remained quite strong, even rallying to its highest reading since March. What explains this seeming contradiction? This was a question under frequent consideration during the recent MWFA table top show in Chicago. We had numerous conversations on this topic at the FCH Sourcing Network table between discussions on fastener data cleansing and distributing complimentary samples of Vegemite. The FDI has measured fastener industry performance and sentiment for over ten years, each month asking North American fastener distributors to rank their performance and sentiment during the past 30 day period. The reading in July came in at an alarming 46.1, the first time the index has dipped below the allimportant 50 mark since May of 2020, when the world was thrust into the uncertainty of the COVID nightmare. “In July, 46% of respondents said their sales were weaker than expected.” FASTENER DISTRIBUTION TRENDS: JULY 2022 At the same time, the FLI jumped to its highest reading since March, remaining comfortably in the optimistic zone with a reading of 58.1. So What’s Going On? “In July, 46% of respondents said their sales were weaker than expected, which was the worst figure since the onset of the pandemic,” said Baird analyst Quinn Fredrickson. “That’s what drove the soft FDI reading.” Indeed, the critical sales component of the FDI figure dropped to 43.2, falling from a very strong 65.5 the previous month. We can all face the fact that there are soft sales months from time to time. So that could explain the drop in the rear view facing indicator. BUSINESS FOCUS ARTICLE CONTINUED ON PAGE 140

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