Business picks up

Staff -- Purchasing, 10/20/2005

The seasonal slowdown in the electronics industry appears to be ending, as more buyers report business is improving, according to PURCHASING magazine's monthly survey of business conditions.

Purchasing's business activity index registered 66.1 in September, up from 64.7 in the previous month. Fifty-seven percent of buyers responding to the survey said business was improving in September, compared to 50% in August.

Because business is improving, more buyers said they expect to increase their purchase orders over the next 90 days. The Forward Semand Index, a measurement of purchase orders, increased from 61.6 in August to 71.4 in September. A hefty 64% of buyers said they expect to increase their number of purchase orders over the next 90 days, compared to just 41% in August.

Buyers also report higher prices. The price index registered 82.1 in September, up from 58.6 from the previous month. Sixty-eight percent said prices were rising, compared to 26% in August.

While business may be picking up, it does not appear to be affecting inventory levels. Only 33% of respondents said their inventory levels were rising, the same as the month before. One reason inventory levels are not rising is availability from component suppliers is high. Fifty percent of survey respondents said supply was loose in September compared to 27% in August.