PURCHASING magazine's latest Business Survey shows the metalworking Business Activity Index—the rate of business expansion among metals-consuming firm—sliding to 48.9 in October. An index reading below 50 indicates contraction, and most surveys of this kind last month show a retrenchment in manufacturing activity.

Such results don't surprise economist Michael Burt at Economy.com, who says: "Weak profitability continues to be an issue for metals-consuming manufacturers. So, with capacity utilization still at low levels and plans for capital spending still weak, a strong rebound in manufacturing activity still is unlikely." Evidence: The metals buying plans index for the fourth quarter was 52.2, which hardly signifies strength in underlying demand. And, there still is no sign of a metals inventory buildup in the works with the index at a feeble 35.0.

Metalworking activity remains stuck around 72% of capacity. These lower-than-forecast end-user production rates are keeping cost-saving efforts in play and limiting any increases in market prices for nonferrous metals and other specialty commodities. And, in October, there were reports of orders falling significantly from levels reached earlier this year.