Prices of gross domestic purchases nationally rose 0.7% in the first quarter and that meshed with the movement of PURCHASING's Industrial Supplies Price Index (ISPI, 1992=100), which rose through the first quarter and April, where it registered a nine-month high of 110.2. However, the index slipped to 109.6 in May because of lower costs of energy, lumber products and wood pulp. Prices of paper products essentially were flat with March, so downward market pressures offset the rise in prices experienced for metals, chemicals and plastics. And some economists suggest that June-August pricing will be relatively flat.

The cost of steel is rising rapidly. A major reason is the imposition of tariffs—but several key nonferrous metals are sliding. The recent increase in demand and prices for chemicals appear to be due largely to buyers restocking inventories and hedging against higher prices. Meanwhile, producers of polyolefins have pushed through a series of prices increases, prompted by rising demand and higher feedstock chemical prices.

Most economists expect prices for industrial materials, supplies and components to rise just 1.3% for the year. Sheryl King, economist at TD Bank in Toronto, Canada, suggests that even with the tariffs, "intense competition from domestic and foreign sources, will keep costs down and prevent domestic firms from raising prices."