“The industrial environment is in a recession – I don’t care what anybody says, because nobody knows that market better than we do,” stated Daniel Florness, Chief Financial Officer of Fastenal Co. (FAST), on the company’s third-quarter conference call.

The man was adamant, and he had reason to be.

Fastenal doesn’t just sell nuts and bolts to local hardware stores. It provides a wide variety of industrial and construction supplies including power tools, packaging materials, electrical connectors, chemicals, HVAC components, and hydraulic systems.

Fastenal serves non-residential construction companies, manufacturers, farmers, railroads, mining companies, and the energy sector.

So, if Fastenal is seeing extreme weakness in its customers’ spending rates, then there’s good reason to believe that the United States is, in fact, suffering an industrial and manufacturing recession.

Of course, others who basically have to be bullish on stocks are saying, “Not so fast.”

To Bias or Not to Bias?

Tobias Levkovich, Chief Equity Strategist at Citigroup Inc. (C), dismissed industrial sector worries on Bloomberg Television last week.

Levkovich noted, “Even if you look at durable goods orders, they have not plummeted 20% to 30% like they’ve done in previous recessions, so every time I hear the words ‘industrial recession,’ I cringe.”

However, we should be wary of his commentary.

Like economists at investment banks, equity strategists basically get paid to tell clients what they want to hear. Their clients own a boatload of equities, so these financial pundits tend to dismiss any and all risks.

For example, heading into 2008, Levkovich was bullish on financials and had an end-of-year S&P 500 price target of 1675 (equivalent to a 14% gain). The S&P actually lost 38%, and 2008 was the worst year for financials since the Savings and Loan Crisis.

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