What do we know about 2017?
Well, we are getting a new president. Stock market has been good to him so far. Kind of hard to gauge what exactly will take place once he takes office but we are in for a new era. He will need some cooperation to do some of the things he has proposed and we will be seeing how that goes fairly soon.
We know the price of imports are going up. They have been creeping up all last year but it seems like there was a pretty large bump sometime around November. And what I’m told is we are not done. So all you people with contacted pricing will need to figure out how you plan to hold down costs or raise prices to your customers. Something will have to give.
Things seem to be improving in the energy market segment with the price of oil rising a bit and the number of drill sites increasing. I know a lot of distributors that were surprised to find out how many of their customers were indirectly tied to oil & gas. If they were able to secure some replacement business not tied to that industry then this year could be a very good one if the price of oil rebounds and that business returns.
Consolidation continued to happen in 2016 and I can only guess that this trend will continue. There is a mad dash by distributors to buy other distributors. It seems like a case of “eat or get eaten”. Last year there were several stand along distributors that were bought by larger distributors with multiple branches. Many times, if you read further into the details you would see that investment firms or holding companies were actually the owners of the distributors that were buying other distributors. It might look like a well known distributor is buying up smaller distributors but often there is a holding company behind the scenes. Eventually, I think we will see larger players come in and swallow up the whole group , essentially buying up a whole group of what were once mom and pop or family run operations. Don’t know if we are a year away from that or several years away, but it sure looks like we are heading in that direction.
I might be mistaken but it seemed to me that acquisition activity was a little slower on the supplier side. Less blockbuster acquisitions in 2016. That never lasts too long so I expect we will see a few surprises in 2017 with suppliers trying to solidify their positions in existing markets or possibly expand into new ones.
The National Industrial Fastener Show (Vegas Show) will be moving to the convention center in 2017. I expect we will be hearing a lot more details regarding which hotels will be the “host” locations but the fact remains we will not be on the strip this year. I believe this is a one year commitment for the show to be at the convention center. In one way, maybe it will keep people at the show longer if they cannot slip back and forth between the casinos and their hotel rooms. On the other hand, being on the strip is one big reason a lot of people like to go to Vegas and attend the show. Emerald Expositions has a lot of experience with trade shows so I will be curious to see show details as they are available.
Last year, when people asked how the year was going, I often was told that sales were down maybe 5-15% for the year. If someone was heavily tied to oil & gas or coal, the percentage might have been 30-50%. With oil rebounding a bit and with the increasing expectations that there will be more infrastructure work, I would guess that most of us expect a better 2017.
I’m sure we will be seeing many of you at the various fastener association events taking place this year, and there are several good ones coming up.
March 15-18 there is a joint conference between the NFDA and Pac-West in Long Beach, California.
April 19-21 the Southeastern Fastener Associations and the Southwestern Fastener Association will have a joint meeting in New Orleans.
June 5-7 the MWFA will hold Fastener Tech ’17 with their annual golf outing taking place on the day immediately after the show.
Hope to see you at at least a few of these events. Good luck in 2017! Hope it is a great year for all of us that make a living in the fastener industry!