The dark clouds facing the world’s fastener industry are brightening somewhat with the revival of global manufacturing  -- but they are still pretty gray.

With the fastener industry operating far below capacity, individual producers are being forced to reduce costs to meet the pricing demands of the world’s Original Equipment Manufacturers (OEMs) who buy the bulk of their output.  Sadly, for fastener makers, the biggest OEM is the world’s automotive industry. It is the biggest end user of fasteners, absorbing over 20 percent of the industry’s output. With a world-wide capacity to produce some 90 million vehicles annually – and demand being about 60 million – the automotive industry is pressuring direct (Tier I) and indirect (Tiers II, III and IV who feed the Tier I’s ) suppliers to reduce their costs. This means fastener makers everywhere are in a life-or-death race to the bottom – the lowest cost producer will survive.

The typical fastener maker produces bolts, screws, washers, rivets in a mind boggling variety of shapes and sizes. Yet most fasteners serve just one function – they hold things together -- the parts, components and other gizmos going the capital goods purchased by industry and big-ticket durables bought by consumers. The typical fastener maker is at the mercy of OEM purchasing agents in about 350 fastener-using industries across the globe. Major purchasers are auto, light and heavy truck and utility vehicle makers, structural fasteners  for the construction and agricultural equipment makers,  special ones for aerospace, HVAC/appliance, and medical equipment, and commodity ones for general machinery producers.

The demand for fasteners is ubiquitous. Locally, their demand depends upon a nation’s industrial output. The following table (Table I.) shows the position of the world’s industrial powers, and their relative percentage of the world’s manufacturing output:

Table I. World’s Leading Manufacturing Economies (In Trillions)

(Source: International Fasteners Institute 2010 Annual Report, pg. 8, 2009 Annual Report, pg. 12)

The results suggest that American markets and production continue to drive the world economy, followed by China as a close second. Drilling down into the data, let’s take a look at recent and projected industrial fastener demand in the United States:

Table II. U.S. Industrial Fastener Demand (In Billions)

(Source: Industrial Fastener Institute 2009 Annual Report, pg. 14)

However, practices in individual industries are quickly changing because OEMs continue to simplify fabrication in order to drive down the cost of assembling their products, according to Mike McGuire, editor of the American Fastener Journal. “Automotive used to about 22% of total fastener