Industry Confidence Index shows gains

The American Hardware Manufacturers Association’s (AHMA) November Industry Confidence Current Situation Index improved to 54.1 from 45.8 in October, while the Future Expectations Index soared to a new high of 241.4, up from 201.7 in October.

Both indexes use data collected in October 2008 as a base reference, with October 2008 equaling 100.

For November, 13% of respondents said sales were up, compared with 11% in October. The survey also indicated 30% said sales were even, and 57% said sales were below year-ago levels, down from 75% in October.

Looking forward six months, the index showed 57% of respondents predict sales will increase, up from 48% in October, and 32% saw sales remaining even, with 11% expecting sales to decrease.

Looking forward one year, the index showed 83% of respondents predict sales will increase, up from 69% in October, and 13% saw sales remaining even, while the number expecting sales to decrease remained at just 4%.

“With unemployment levels in the country still stuck at 10%, and with the housing sector of our industry still struggling to return to a sustainable growth stage, we feel it will be well into 2010 before the hardware/home improvement industry begins to see significant sales increases,” said Timothy Farrell, president and CEO of the AHMA.

The index also touched on "hot topic" issues. First, it asked members if they thought the Stanley/Black & Decker merger will prove to be a good move for both companies by increasing sales and profitability: 34% responded “Yes,” 40% responded “Not sure,” and 26% responded “No.”

The question was also posed: “Unemployment reached 10.2%. Looking forward to 2010, how likely is it that during the year your company will add to its work force? 53% responded “Not likely,” 40% responded “Somewhat likely,” and 8% responded “Very likely.”

The index is a monthly indicator of the economic health and "mood" of the industry based on a survey of AHMA members.