It has been a rough couple years, especially for many of us in the fastener manufacturing business. Is there a hope on the horizon?

Supply Chain Woes Led to Slow Fastener Manufacturing Growth

In the last five years, the fastener manufacturing industry has only grown 0.1% on average per year. Obviously, the global COVID-19 pandemic was a large factor in this decrease. In addition, the global chip shortage has crippled supply chains, particularly in the automotive sector. For many fastener manufacturers, automotive makes up a substantial portion of business. For Fastco, we have historically seen automotive make up more than 95% of our business. Currently, automotive makes up around 80% of our business.

With auto industry continuing to limp along, it is no wonder that fastener manufacturing growth has been much slower than the rest of the US economy and even the manufacturing sector as a whole.

Fastener Manufacturing Growth for 2023 and Beyond

But we are beginning to see a shift in the forecast.  The latest report on the industrial fastener market from Spherical Insights & Consulting projects that the industry will grow from $86.62 billion in 2021 to $146.3 billion by 2030. This represents a compound annual growth rate (CAGR) of 6%.

While a 6% CAGR isn’t fantastic, it is definitely stable. And for a large and established industry as a whole, it’s nothing to scoff at. The growth of industrial fasteners as a whole exceeds the 5 year projected growth of the auto industry itself.

So what industries are stepping in to fill in the gaps and help grow fastener manufacturing?

Some obvious heavy hitters are solar (20.5% CAGR, growing to a $223.3 billion industry by 2026) and construction (7.3% CAGR from now through 2029).

Within the auto industry itself, we are also seeing a forecasted annual growth of 25.4% from 2021 – 2028 in the electric vehicle sub-sector.

Diversification in Industries Served

While one could argue that it is always a good time to be thinking about diversification, the argument is particularly poignant right now. Companies should work to diversify the industries they serve, the products/services they offer, and the subcontractors they utilize in their supply chains. Diversification leads to stability. Sure, it may not protect a company from a global recession, but it will certainly help them weather industry-specific crises.

At Fastco, 82% of the new business we have won in 2022 is for industries outside of the automotive sector, including solar, construction, agriculture, material handling, and industrial equipment. We have also been able to provide solutions to customers looking to shore-up supply chains or dual-source products.

As we look to the future and the industry growth projected, we are excited to see more growth on the horizon.