It is no longer, "Do we have an economic slowdown?" but how deep it will be and how long it will last. While most fastener markets are sluggish, automobile manufacturers, one of the largest user segments of industrial fasteners, are probably the hardest hit.

Distributors are planning and protecting themselves financially, according to a specialist in fasteners for the structural, commercial and electronic industries.

Michael Smith is president of Smith Associates, a manufacturers' representative and distributor covering the region from New York to Virginia.

"We seem to be coming along at an OK pace. I'm running into distributors who are finding it soft, but others are having very good sales months. I think we've brought a lot of the downturn on ourselves. It's as if many people are saying that even if it's good, they better watch out," he said.

A line of handles and latches has been a bright spot in the last six months, Smith said.

Another strong market is new and retrofit bridge construction, which is "seeing a lot of new dollars in the Northeast because repair and replacement are so badly needed," Smith said. "The eastern third of the country is built around water and bridges are falling apart. I think United States manufacturers need to wake up and make structural bolts and all those items. They are a hot imported product now."

Consolidation in the industry, like the economy, presents opportunities and problems for manufacturers' representatives and distributors. From an ethical standpoint, according to Smith, if a company who makes a line he is selling buys a competitor who makes a different line, Smith is compelled to make a decision about carrying both lines.

"I am strictly ethical in the lines I sell, so when I say I'll sell only Company A cap screws, that's what I do," he said.

The economy and competition are affecting sales in the Midwest, but James Ruetz, president and general manager of All Fasteners in Racine, Wisc., sees some bright spots in his markets.

"When the economy goes south, companies often become more receptive to having their inventories and repetitive purchasing activities handled by an outside firm," he said.

However, Ruetz notes that his company has looked to cut costs in general because gross sales and margins are down from a year ago.

"We give much more attention to activity-based costing and activity-based management during economic downturns. Consolidation has definitely slowed down. I suspect, however, that as more [distributors] decide to jump into the fastener market next year, the consolidation trend will continue," he said.

Competition, always a pressure in fasteners, means looking for ways to cut costs. "We all tend to be more aggressive in tighter times," he said.

At Tower Fasteners, a distributor selling mainly to the network, telecommunications and computer markets, sales are off about five percent from last year and 10 percent below projections.

Mark Shannon, Tower's vice president, expects sales to remain soft through the third quarter and pick up dramatically in the fourth. Some new products are ready to become hot items in his area.

New products that are selling well despite the economy are right angle fasteners, access hardware and miniature installation tools for rivets," he said.

Tower Fasteners is looking to acquire companies in the near future, but is being careful in its choices.

"I expected more activity [this year] but the major players in consolidations made some poor decisions when the market was good and are paying the price now. The next six to 12 months should be very interesting. We are actively looking to acquire companies," he said.