Reports from the manufacturing sectors remain relatively soft, and reports from metals buyers still offer little sign of a summertime jumpstart in production. Note that the metalworking marketplace's Business Activity Index in July (53.3) is just barely above the 50.0 mark that separates expansion from contraction. Also, buyers' forecasts show virtually no growth in 90-day business expectations.

For now, buyers continue to postpone expanded purchases of steel, aluminum, copper, brass and other production metals. This meshes with reports of a slight decline in factory and warehouse inventories.

U.S. Treasury Secretary John Snow noted in a July press briefing that domestic companies have cut costs aggressively; so, this leaner cost base, when combined with low inventories, means that U.S. businesses "are poised for a return to strong manufacturing activity and profitability" when demand picks up. "The American economy is coiled like a spring and ready to go," Snow said. However, he agrees with Federal Reserve Chairman Alan Greenspan's message to Congress that manufacturing won't show "real growth" until the fourth quarter or, more likely, the first quarter of 2004.

**This story is based on data collected monthly from buyers by Purchasing magazine. The data (leadtimes, business strategies, pricing) is available for sale in the product catalogues at http://www.purchasingdata.com.