Breaking News: Buyers say business conditions are nearing growth again
Purchasing's Business Conditions Index spikes in July to near-expansion
Dave Hannon -- Purchasing, 7/10/2009 2:19:08 PM
After a one-month dip, Purchasing's
Business Conditions Index shot up almost six points in July to 48, on a
diffusion index where above 50 represents expansion. Twenty-nine percent of buyers polled this month said their firms have seen an increase in orders in the past month, while another 39% said business was staying level. Similarly, the latest ISM Purchasing Manager's Index (PMI) stands at 44.8 in June, having ticked up two points in the latest reading.
"Demand continues to increase and factory utilization is increasing," reports the senior buyer at an electronics firm in Utah in the survey.
"Business is a little better than expected, although some manufacturers continue to raise prices, which is the wrong thing to do in this economy," says the materials manager at a West Coast electronics firm.
"The second quarter was stronger than expected, but customers are beginning to slow down orders, probably due to the supply chain being replenished and uncertainty of how the economy will settle out going forward," the purchasing manager at a Midwest Chemicals firm surmises.
"We're seeing quotes turn into orders finally," says the buyer at a Pennsylvania manufacturer.
And buyers are beginning to plan for an increase in orders. Purchasing's 90-Day Buying Plans Index continued up this month to 52.7, a two-point step up from a month ago, when the index made its first move above the expansion threshold in a year. The shorter-term buying plans this month still remain more cautious. Currently transportation is the only spend category above 50 on the list of 30-day buying plans.
"Our industry continues its downward trend but we may have hit bottom so we are now buying heavy to stock up for seasonal peak," says the buyer at a corrugated company in the July survey.
Now Playing: 