• Buyers can expect fewer supplier mergers this year, suggests analyst Gregg Polle at Salomon Smith Barney in New York. Value of U.S. mergers and acquisitions dropped 65% to $208 billion in first quarter 2001 from $600 billion in first quarter 2000. Polle sees less merger activity this year "because volatility in the stock markets makes deal planning and timing difficult."
• An increasing number of tier-one and tier-two automotive suppliers are seeking rebates and give backs from their raw materials and components providers as automakers continue to press for across-the-board cost reductions. Chrysler Group's insistence on 5% price cuts and similar, albeit more modest, demands from GM and Ford have forced supplier companies to spread cost reductions throughout their supply bases.
• Production cuts at Cominco Ltd. plants in British Columbia are causing short-term supply tightness in the North American zinc market. The Toronto-based firm has cut smelting to free up electric power for export to California. Roger Brain, vice president of marketing and sales, says the firm is buying zinc from other producers to supply customers with the 100,000 metric tons it won't produce this year.
• Companies are reining in travel costs by canceling meetings at hotels, which receive 25% of annual revenues from business meetings and other group events. Canceled bookings for hotel meeting space doubled to 4% in first quarter 2001 from 2% a year ago, says consultant Bjorn Hanson at PricewaterhouseCoopers in New York. He sees conference room revenues at hotels growing only 2.8% this year, the smallest growth rate since 1992.
• U.S. foundries may ship just 14 million tons worth of iron and steel castings this year, the lowest shipping year since 1992 (12 million). Domestic foundries, which supply 83% of ferrous castings purchased annually in the U.S., shipped an average 16.5 million tons annually in 1993-2000. But industry insiders—such as Charles M. Kurtti of Neenah Foundry Co. in Wisconsin, say reduced production by key end-user segments—especially automotive and heating, ventilating and air conditioning (HVAC) equipment—could cut domestic foundry sales by 15% or more this year.

Roughly four in 10 industrial buyers report cutting back on purchases of primary and fabricated metals, MRO goods, plastic and rubber products and office equipment.