If PURCHASING's chemical industry indicators whispered "recovery" in February and March, they screamed the word in April. New order index for chemical consuming companies went from a rising—albeit still negative—position in March 2002 to a strongly positive 62 in April as 42% of buyers reported stronger business activity for their companies and 40% were at least stable. This, in turn, inspired a flurry of purchasing activity among companies that had been supplying their production lines hand-to-mouth since last fall.

PURCHASING's Forward Demand Index among chemical-consuming companies surged to 73 in April as more than half of chemical buyers reported plans to expand buying to meet anticipated production needs in the coming ninety days. The mood is still very cautious, however, as PURCHASING's inventory index for chemicals did not budge off its floor in the very low 30s.

PURCHASING's Chemical Price Index edged up in April (details on page 16C6), but producers' pricing moves appear to be less a function of demand and more a function of higher costs driven by factors such as surging oil prices. Curiously, only 8% of buyers admit to paying higher prices last month, which suggests that downward revisions to transaction prices may be forthcoming.