PURCHASING magazine's Business Activity Index for all companies registered at 55.5 in early September, showing slight improvement in business conditions for a fourth consecutive month.

However, "Our overall business has taken a severe downward trend," says the purchasing agent at an Ohio rubber products company. "It appears as though we're heading into a new slowdown," chimes in another buyer.

Business among metalworking companies has slowed from a peak in May, with the September diffusion index at 53 for a second consecutive month. "Manufacturing remains weak," says the production control manager at a metal parts-making firm in Kansas. The procurement manager for a Minnesota-based motion control company adds: "Our order [book] still is 30% below this time in 2001."

Electronic products companies are still hurting as well. "The electronics industry continues to suffer from a lack of capital expenditures across all business channels," says the commodity manager of an electronics manufacturing services firm in Wisconsin. "With no long-range forecast available, it is a very hand-to-mouth environment at this time, which makes strategic and acquisition planning difficult."

But not all buyers polled are down in the dumps. For example, the purchasing manager for a lighting pole manufacturer in Minnesota says, "business is picking up a little." The PMs for competing commercial lighting products firms are both reporting "steady incoming orders." The materials manager for a safety products firm in Kentucky says, "While the industry is down slightly, it's still good compared to most other industries."

"Our business is in automotive and heavy truck," says the purchasing manager of an Indiana plastic parts making firm. "We are fortunate that we supply parts to General Motors for their SUVs and pickup trucks, which are hot. "He adds that, "the heavy truck market is also very strong for us just now." Reason: Fleet managers have been buying vehicles before new engine emission regulations take effect Oct. 1.

Buyers from several chemical companies say the industry seems to be holding steady. A purchasing team leader says his firm is doing very well against targets set by its board of directors." The purchasing manager of a Pennsylvania chemicals firm says that, "overall, business isn't as good as we would like, but it is close to projections." Although "business is good," according to a purchasing specialist at a New York chemicals plant, "raw materials costs are up and it is hard putting through price increases to customers."

Metals top the list of commodities for 21% of the buyers with supply problems in late August and early September. "Mills are producing what fits their schedules, not necessarily what works for the customer," says the purchasing manager of a California cutting tools producer. "Consequently, some material is shipping up to six weeks early, other material is not even on a current mill schedule." "Steel pricing has become a huge issue cost wise," adds the vice president of purchasing at a manufacturer of hardware, including fasteners like screws and nails. "The ethics of the steel industry are questionable with all deals being abandoned" to get higher prices during a period of tight supply. In fact, a large majority of buyers report tight supply, high prices or both for steel—especially flat-rolled steel products.