The Fastener Distributor Index jumped to 56.4 in December (vs. November 50 ), reflecting improvement across most components of the FDI (sales, supplier deliveries, and customer inventories).
Th improvement marks the strongest FDI reading since before the U.S. presidential election (56.5 in October 2024). Sales, supplier deliveries, and customer inventories saw improved, while employment levels acted as a drag on the index. Although still growing, the employment index moderated to 52.9 (vs. 54.8 in November) as the share of participants noting levels “lower than seasonal norms” increased to 11% from 3%; however, the overwhelming majority (71%) still report employment is in line.
Sales trends were particularly strong, with the index rising to 58.7 (compared to just 49.6 last month) and 43% of respondents reporting sales above seasonal norms (vs. a mere 23% last month), exceeding the one-year average of 38%.
Sales performance was also helped by higher pricing, which increased for 49% of participants (vs. 42% in November) and year to year for 89% (77% last month). Meanwhile, 26% of participants reported slower supplier lead times/deliveries (up from 13% in November), though the majority (69%) continue to indicate similar levels.
Lastly, 17% of respondents said customer inventories were “too high,” compared to just 3% last month.
The Forward-Looking Indicator (FLI) declined to 51.2 in December from 55.4 in November, driven by customer inventories (17% indicated “too high” versus only 3% last month), though the majority of respondents say in-line (69%). Despite the headline sequential dip, the data suggests a stable six-month outlook, with 51% of respondents forecasting better trends six months from now (was 52% last month), which is higher than the 24-month average (43%). Just 14% forecast lower activity levels in six months, drifting slightly lower from 16% last month, with the remaining 34% anticipating stable momentum (vs. 32% last month).
Despite fewer overall selling days due to holiday timing (“The limited number of business days in December was expected to restrict sales and it did. No surprise. We will do what we can to make up for it in January ”), the year ended stronger for most.
“The quarter ended on a record note,” one respondent noted.
The 2026 outlook skewed positive.
“(2025 was) our best year to date. I expect the same type of activity in the new year.”
Improvement seems to be gradually emerging.
“Customers are beginning to think they might have new jobs beginning late first quarter, where before they were nervous to commit.”
On the tariff front, one respondent summarized the consensus view.
“Tariffs suck.”
Higher prices are serving as an offset to lower volumes in some cases.
“Passing along round 2 of tariffs has been a challenge. Lead times have come down slightly. Many customer volumes have decreased although it’s masked revenue wise due to inflationary tariffs/surcharges.”
Lastly, tariff confusion seems to be running even higher in Canada.
“Total confusion with CBP on tariff calculations has led to uncertain pricing. Importers are starting to receive letters advising them of miscalculations when CBP did virtually nothing to clarify the 232 rules.”
Another respondent noted: “Canada has hastily announced and will enforce a global 25% tariff on steel derivatives and specifically, all fasteners Beginning Dec. 26th (list was confirmed only Dec. 12th!). Without any real domestic sources for most parts, this will have a dramatic increase on prices.”
While tariffs remain a challenge, pricing is an offset to soft volumes currently and the outlook is waxing slightly more positive into the new year.
Fastenal’s 11.8% overall November daily sales growth was above normal seasonality. Fastener sales grew by 14.6% y/y – an increase from 12.8% last month. Additionally for FAST, safety was +8.1% and other non-fasteners were +11.9%.
The FDI is a monthly survey of North American fastener distributors conducted by the FCH Sourcing Network, the National Fastener Distributors Association and Baird.
