Business activity in the manufacturing sector grew in April for the 12th consecutive month with 59% of the buyers polled reporting economic expansion. "After a three-year lull that began in 2000, strength has returned to our main product lines," says the purchasing manager of a machinery components factory in Minnesota. Similarly, the purchasing manager at an automotive parts plant in Wisconsin says his company's major customers "remain very busy."

The Federal Reserve Board's industrial production index has risen back to where it was at the start of 2001, which explains why national manufacturing capacity utilization has edged back up near 77%. Little wonder that PURCHASING magazine's monthly survey of buyers put the April business activity index at 74.8 (where 50 separates expansion from contraction), making the four-month average 70.1, as compared with 56.9 in 2003. Also, the 90-day buying plans index was a healthy 78.8 in the April survey, and not too far off the highest-ever 81.2 recorded in February.

The nation's manufacturing industries are recovering, says Sophia Koropeckyj, director of industry economics at Economy.com, "although pricing in general remains weak, input costs are rising, and profitability has yet to return to pre-recession levels." So, there is room to grow for the factory economy to get back where it was in early 2000. "Shipments and incoming orders have been increasing over the past three months," says a senior buyer in Ohio. "But, business conditions still appear to be tight, and there is little room for error."

That may be why some comments from purchasing and supply managers tend to be more cautious than those from the politicos, who keep proclaiming that economic recovery is nearing full traction. "Business is best-described as sputtering, on again and then off again," says a senior buyer at a centrifuge casting plant in Wisconsin. The materials manager of a plastic parts-making plant in Arizona says that "business still is a little skittish" and suggests, "The economic recovery still is more media hype than fact."

The design manager at a plant making fire extinguishers in Louisiana agrees: "Everything is moving up, slowly." That's probably why the purchasing manager of a steel sheet processing plant in Pennsylvania says that "the beginning of the month seems like business is going to be grim, but activity always picks up toward the end."

The purchasing agent at a packaging products plant in Washington says that while sales are brisk, management worries it's in response to an announced price increase in May, "and may decline swiftly after that." Increases in buying prices for metals "are reducing our margins on existing sales orders," says the manager of materials planning at a South Carolina manufacturer of industrial equipment. "We are being forced to increase the selling prices of our products in the second quarter." What is termed "the skyrocketing price of raw materials" is forcing a price increase on commercial laundry equipment manufactured in Wisconsin. "The marketplace will react to this price increase," says the purchasing manager, "and it may cause orders to drop."

Buyers have been concerned about higher energy and material costs for several months now, especially for steel. A purchasing agent in Illinois speaks for many when he says: "Steel prices are skyrocketing because the mills are raising base prices and adding scrap surcharges to increase their profits." Yet, Economy.com says weak pricing still plagues most steel-using industries—makers of industrial machinery, appliances, auto parts, office furniture and manufactured housing, for example. Also having trouble still in boosting prices are makers of paper and packaging products, for processing and telecommunications equipment, computers and semiconductors.

There were growing concerns in April about the availability of certain metals and the weaker dollar's impact on materials that used to be bought from offshore sources. And, as leadtimes extend, concerns of buyers are expanding regarding availability of numerous types of materials- such metals as carbon steel, stainless steel, copper, brass, aluminum, nickel; chemicals such as acetone, sulfonates, amines propylene and methyl acrylate, and resins such as polyethylene, polypropylene and polyvinyl chloride.

"Business is good, but getting materials is getting harder," says the purchasing manager of a metal fabrications company in Texas. "The instability of delivery in raw material markets really is a cause for concern," adds another Texas buyer, at a food equipment manufacturing plant. The technical buyer at an original equipment parts plant in New Hampshire says the impact of rising prices and delayed deliveries for steel and other metals "is creating longer leadtimes and higher pricing for equipment and parts, and jeopardizing on- time deliveries to our customers."

"Electronic components are getting harder to buy on a timely basis," agrees a purchasing director in Illinois. And there are concerns about the availability of such memory chips as DRAMs, motherboards, integrated circuits, and liquid crystal display (LCD) monitors, where leadtimes are reported out five months.