This is a part of the 2017 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2017 Distribution Trends Special Issue
After tepid growth in 2016, activity in the fastener industry has "surged" since the start of 2017. The Fastener Distribution Industry's seasonally adjusted May 2017 index was 64.6, above the expansion threshold (50) for a fourth consecutive month. At the midway point of 2016, the FDI was hovering just above that threshold and held there throughout the year. While the accelerated growth itself is welcome, the forward-looking sentiment is also bullish, according to the report; 61 percent of FDI survey respondents expect higher activity levels over the next six months.
Fastener industry continues to consolidate. The largest players continue to buy up small independents. And distributors in other sectors are targeting the sector to expand product lines. Applied Industrial Technologies, for example, acquired three fasteners distributors in 2016. In addition, acquisitions are being made to "align top global suppliers and customers," noted one respondent to the 2017 MDM market trends survey.
Some established players may look new, however, as they've gained new identities and/or ownership over the last few years. In the first half of 2017, Ferguson Enterprises announced an agreement to sell Endries International to a private equity firm. In 2015, Optimas OE Solutions was formed as a spinoff from Anixter. "I can't think of a single brand new fastener distributor that started in the last year or two," says Mike McGuire, former publisher of American Fastener Journal and consultant on the fastener industry.
Advanced engineering skills needed but lacking to break out of the commoditization cycle. Distributors often lament the lack of interest by young people to pursue a career in distribution. The fasteners industry may be feeling this more strongly in some cases, as perceived commoditization of the product category continues to grow. Few independent training programs exist to develop the engineering skills required to truly understand the applications in which different fasteners can best be used, McGuire notes.
One college program, however, is trying to change that perception and provide that advanced knowledge to a new generation. Rock Valley College, Rockford, IL, launched a manufacturing training center as part of its manufacturing engineering technology program to provide hands-on experience for how machine elements are impacted by various environmental factors.