Latest comments from purchasing and supply executives indicate the manufacturing recovery still has no legs. Typical is the comment from a materials manager at an electronics firm in Massachusetts: "We are having a very slow recovery in 2002 from a down year in 2001."

Whether the buyers work for firms that make gaskets in Texas or auto parts in Ohio or precision metal fabrications in California, the message is the same: "Business is depressed and uncertain." That's the terse comment from a materials management director for a telecommunications equipment manufacturer in North Carolina.

The purchasing manager of a heavy machinery manufacturer in New Jersey says, "The capital goods industry still isn't receiving big orders." Similarly, the purchasing agent for an industrial pump maker in New York says: "Overall business is flat with no expected growth until the first quarter of 2003."

Also reported to be still depressed are aerospace, industrial machinery, construction machinery, railway equipment, fiber optics, wire and cable, telecommunications equipment, rubber and plastic parts, textiles and home furnishings. In fact, remarks from buyers about business conditions generally match the commentary from economists, who now agree that manufacturing's recovery has been spotty and much slower than had been expected earlier in the year.

But that doesn't mean there are no supply issues. Steel, especially sheet steel, is creating the biggest sourcing problem in terms of both availability and pricing. Other trouble spots showing up in PURCHASING's latest Business Survey include timely deliveries of nonferrous metals and fabricated metals parts (19% report trouble), extended leadtimes for electronic components (13%), and pricing distress for certain chemicals and resins (12%).

Steel markets are experiencing extreme supply tightness. Domestic mills have shuttered nearly 16 million tons of annual capacity. Imports have been significantly lower since the Section 201 import tariffs were announced in March. Steel traders say the earliest they expect import supply to rebound is September. So, it's no surprise to find the metals buyer for a stamping company in Mich. saying: "Steel has become a major headache because of the tariff situation, which has caused higher pricing, 14-week leadtimes from the mills, and some shortages." PURCHASING Magazine's market basket of eight carbon steel products for June averaged 23% higher than in March before the Section 201 tariffs were imposed.

Overall, fewer metals buyers polled in June plan to boost purchases in coming months compared to April or May. "Still, there is an unusual dynamic in the steel market these days," explains the purchasing director for a manufacturer of solid waste disposal and recycling equipment in the Midwest. "Domestic mill production is down, so supply is limited. Pricing is up while customer demand is down." This buyer wonders: "What happens when some of the closed steel mills reopen?"

The tariffs imposed by President Bush have depressed supply of foreign steel. Weak sales during the previous two years resulted in millions of annual tons of domestic capacity being idled. However, investors and other firms have bought about half (eight million tons worth) of the closed capacity and plan to start shipping steel from these plants later this year.

Current tight availability and higher steel prices have also created problems for buyers attempting to source through service centers. The purchasing manager for a crane product producer says: "Products that used to be in stock now have three-week leadtimes." Metals buyers are complaining the most about lengthened leadtimes for hot-rolled and cold-rolled sheet, electrogalvanized sheet, painted sheet and stainless sheet and plate.

Among nonferrous metals, delivery problems appear to be centered in copper sheet, aluminum sheet and plate, and titanium plate. Also a problem lately is the lack of quick delivery on metal parts: fabricated steel components, steel forgings, iron and aluminum castings and steel, copper and aluminum wire products.

Chemical buyers, meantime, report short supplies in some regions for acetone, chlorine, methanol, sodium sulfate and specialty surfactants, along with polyvinyl chloride and polypropylene resins. Buyers report escalating prices for polyethylene, polypropylene and polystyrene resins and some fiberglass.

Electronics buyers present a lengthy list of components that have extended leadtimes ranging from sensors and power supplies to relays and connectors. Longest leads appear to be for specialty products, such as custom semiconductors, some electronics assemblies, and custom motherboards and machined components.