I’m trying to ignore what people seem to be suggesting. I’m asking customers, “So, you getting ready for the Vegas Show? You going to the All American Fastener Show?” Then there’s always the old reliable, “What are you hearing out there? Any rumors?”
I do get some responses but eventually we get to, “So, how are you seeing things? How’s your business?” I’m unhappy to share these but here are two separate responses I got just today:
“It’s like someone turned the spigot off. We have just slowed down.”
and,
“We are probably only sending four people to Vegas. Business has been really soft lately.”
Kiplinger newsletter has suggested since the beginning of the year that business would be soft in the middle and we would see growth in the 3rd & 4th quarters. ITR reported to the NFDA members that the business climate was in good shape and NFDA members needed to focus on how to grow their business and not worry about any slowdowns. Let’s hope they are both right and that this is just a momentary blip.
The person whose “spigot” has been turned off has some business tied pretty closely to the oil & gas industry. That market has been soft, for sure. On another recent call on a customer heavily tied to the oil & gas pipeline industry, I was told the price of gas is purposely being kept low to hurt the Russian government as they rely heavily on their revenue from oil & gas. This particular gentleman pretty much suggested the Saudis are over producing to reduce the cost of oil in order to support us in punishing the Russians. Was an interesting discussion and I don’t know if that’s true or not true, but I do know he is in close touch with business in Houston and with many people in the pipeline supply chain. I know for sure the low levels of activity in drilling and fracking are having an impact on several of my customers in the Midwest.
I also read an interesting article suggesting that the cost of extracting oil and gas is reducing due to improvements in technology. The old adage was something like, “if the price of gas is above $2.50 a gallon then it is profitable to keep drilling”. But, if your technology improves and you drive down the cost of extracting the oil, then maybe you can still make money if the cost of gas dips lower. At least, that was what the article was suggesting might be happening. That would be good.
Anyways, some kids started back to school this week, and that means you’d better start making you reservations for Vegas. We are still expecting a large group of people to show up at the Bourbon Room at the end of the night after the first day of the Vegas show. I have spoken to a lot of people about trying to move our hundreds of fastener people to another venue where we might be able to actually hold a conversation, but I’m not sure we can pull that off in two months. Maybe a pool party? A party at Margaritaville? Or, if the weather is nice we can hang outside at some open air bar. For now, the Bourbon Room is just such an easy venue as it is so close to the show, the hotels and the other after show parties. But, going somewhere else is worth discussing.
T.S. although our business is up it still remains a little flat. We do a lot of quoting and hope that some of these people begin to pull the trigger. good fastener professionals will find a way to get a step ahead. thats why John Butler is kicking but, i cant wait till he wants to move to sunny Cleveland
Commpliments from the real Solution Man are much appreciated. Finding a way to succeed is what we do! I wish everyone success as mediocrity is unacceptable.
Business seems to be OK on the west coast, but customers are weary. Anything related to Oil out here is down. However, there does seem to be something going on in the larger market that you touched on. I watch the Nightly Business Report and it seems that most publicly traded companies are announcing earnings beats but revenue misses. In other words they are making more money but selling less. I believe technology is to blame for both.
Is this a good thing or bad thing? Well, it depends on how well you are positioned to take advantage of it. I personally think this is a good thing – “do more with less”. But industries will get disrupted, and people will loose jobs. The trick will be to get companies and people to change in-step with technology and the economy, which is not an easy task.
With respect to fastener companies, we see a trend where the bigger boys are doing all they can to add value, so they don’t get stuck in pricing wars or loose business to direct overseas buying. Again, they might be selling less, but they are making more money.
Everyone I speak with tells me business has slowed. This is everywhere in North America… and also in Europe, Germany and Finland (where I am today)
There are very few manufacturers still running at peak levels, most have slowed in our coverage of central US….
I saw where the FDI dropped a bit last month. In line with what you and I seem to be hearing in the street.
TS, thought provoking post as always. Our market is up and we were 15% above last year and as a matter of fact since I joined the company we’ve had similar growth each month. And yes, I will take that thank you very much!
I see Q4 will mirror Q1 of this year. We are not in the gas & oil market.
Our book to bill last month was at 98 but back above 100 MTD. Spoke to a competitor today and they are leaking.
I suppose we are one of the lucky ones or maybe we’re just doing something right!