Looking at the composition of growth in first quarter Gross Domestic Product (GDP) it's not surprising that orders to electronics-consuming companies have leveled off a bit in the second quarter. Between November and April, PURCHASING's Business Activity Index for electronics-consuming companies reversed from a deeply negative 27.5 to a strongly positive 61.0. But much of this massive trend shift was driven by the 40% annualized growth rate for consumer durable goods spending that was recorded in fourth quarter 2001 against a backdrop of severely depleted inventories. Advance report from Commerce shows that spending for consumer durable goods (and all their electronics content) actually declined at an 8% annual rate in first quarter 2002. Softening this blow to the electronics industry was a 20% annualized increase in federal defense spending. Business capital spending, meantime, was at best a neutral factor for electronics demand in Q1 2002. Note: PURCHASING's index tracking personal computer demand among U.S. companies remains well below the neutral mark (see chart on this page). On the price front, electronics buyers are detecting more increase attempts by producers, but there's little evidence that hikes are sticking just yet.