Prices rising once again
By Staff -- Purchasing, 8/10/2000
FEWER BUYERS REPORTED PRICE INCREASES THIS MONTH, COMPARED TO JULY, according to Purchasing's monthly business survey. About 56% of buyers say prices are increasing, compared to 66% in July. A little more than half of respondents (about 58%), expect business conditions to be better in six months' time. This is about four percentage points higher than last month's data. About 34% of respondents think conditions will remain the same, and only 8% feel business will worsen. About 77% of buyers surveyed say that material availability is normal, which is down from 92% for last month. Seventeen percent of buyers say material supplies are tight and 6% of buyers say availability is loose. Physical inventories remained the same for 52% of respondents in July. Only about 20% of buyers say they are building inventory levels, while about 28% say they are reducing their inventories. About 35% of buyers saw an increase in capital spending in July, while almost half (48%) said that capital spending was unchanged from June. More buyers saw reduced capital spending this month (17%) compared to last month (29%).
Buyers' identify "constantly changing prices," along with complications during rush deliveries and long leadtimes as the biggest procurement challenges this month.
Other problems include poor customer service from some suppliers, damaged goods incurred during shipping, and imported materials.
Items in short supply:
Materials buyers say are in short supply this month include polyamide film, vulcanized rubber, chemical feedstocks for plastic resins, tall oil fatty acids, pigments, and some flexible intermediate bulk containers (fibcs).
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