Despite President Bush's $300 checks and the Fed's aggressive interest rate cutting, the economy shows few signs of reviving this summer, according to Purchasing's latest monthly grassroots business survey. But while business conditions have not improved much, they haven't gotten any worse. In fact, for a fourth consecutive month, Purchasing's diffusion index for month-to-month business conditions has gained a point, rising from 44.5 in May to 45.5 in June.

To describe recent business conditions overall, most purchasing pros polled by Purchasing choose words and phrases like, "quiet", "seasonal slowing", "better than expected", "small increase", "surprisingly busy" and "still good, for a downturn."

A purchasing agent from Itasca, Ill., says, "Business is not slower but our backlog is smaller. Customers seem to be waiting until the last minute to order."

A purchasing agent from Mankato, Minn. says, "There was a huge slowdown in April to mid-May but some orders have picked up again. We're busy quoting new business." A procurement director from Indianapolis says, "Business is down 10% from last year, but the downtrend has stopped. We expect an increase over the next few months." An exec in Milwaukee, Wis., describes business conditions as "Choppy: good one week and lousy the next."

Other economic indicators bolster the notion that economic conditions have, at very least, stopped deteriorating—

• At 4.4%, the civilian unemployment rate was little changed in May, according to the U.S. Department of Labor.
• In its Beige Bookreport, the Federal Reserve says economic activity levels were little changed in April and May. Wage and price increases were moderate and there was a big rise in energy exploration.
• Single-family housing starts in May were on par with April and 3% higher than May 2000, according to the U.S. Census Bureau.

Purchasing's diffusion index tracking materials inventory strategy remains at just 26.0, however, suggesting that manufacturers' stockpiles are still too high relative to sales. Here are price and supply conditions highlights by major commodity segment:

• Paper and corrugated: Purchasing's price trend diffusion indexes for paper and corrugated have both come down to neutral (52.5 and 49.5, respectively), meaning that few buyers are experiencing price changes in either direction.
• Industrial chemicals: Buyers in many markets are still being hit with higher prices due to tight supplies and high energy and feedstock costs, though June saw somewhat fewer upward price moves than May. Leadtimes are generally stretching for chemicals while capacity utilization is low, suggesting that producers are restraining supplies in order to keep pressure under prices.
• Steel: Buyers say steel quality is starting to suffer as 30% sales losses are being reported with no recovery in the foreseeable future. "Attitudes and morale are terrible and it shows in the end product," says a steel buyer from Montgomery, Ill.
• Aluminum: Diffusion index tracking aluminum pricing slipped to 47.0 in June, as the number of buyers reporting lower pricing began to exceed the number reporting price increases. But scattered leadtime stretching is starting to appear as producers reel in output. A VP purchasing in New York City says, "North American production of aluminum is down due to electric power sell backs and pending drought conditions. Imported aluminum will make or break the U.S. supply/demand balance as soon as interest rate cuts spur economy forward."
• Copper and brass: Multiple buyers say beryllium copper pricing is "outrageous" but as a whole, copper and brass pricing was flat in June, registering a diffusion pricing index of 49.0.
• Semiconductors: The diffusion index for semiconductor pricing is 44.5, indicating continued downward pressure for the month. Demand is weak for electronics, in general, but relief is anticipated when consumer electronics manufacturers begin shipping systems for the holiday season.
• Computers: Big makers of computers and data-processing gear are expected to cut their second-quarter earnings estimates, putting estimates for their suppliers in danger too. Buyers say price cuts were rampant again last month, as sellers scrabbled for market share.
• Transportation: Pricing continued to rise for most buyers in June, with a diffusion index at 78.0. A PM in Decatur, Ill., says, "Transportation companies are becoming lethargic and nonresponsive."