Metalworking isn't so robust

Staff -- Purchasing, 10/7/2004

The metalworking index has been subdued since June, although post-Labor Day activity has perked up a little; still, the latest buying plans are the lowest in 11 months. Only half of the metals buyers in PURCHASING's September poll say their companies' business activity increased from the month before. Another 31% assess business as stable and just 19% see manufacturing growing, but slowly. "Sales are good; however, profits are not," says a purchasing manager in Illinois.

The survey also continues to find anecdotal commentary that pricing pass-along remains tough. "Steel costs have killed profitability," says another Illinois buyer. "The manufacturing division has absorbed the high steel cost to maintain or increase market share, but profits have suffered." Similar comments have come from buyers of aluminum, copper and brass.

"Steel has been, by far, our worst headache," says a Michigan purchasing manager. "Supply has caught back up with our region's demand, but pricing has remained high." That comment meshes with the PURCHASING poll, which finds 74% of metals buyers paying more in September than in the previous month.