Purchasing for Factories Continues to Be Weak
Purchasing activity in the manufacturing sector continued to contract in the month of February, according to a survey of buyers by Purchasing magazine, although the pace of contraction slowed a little when compared to the previous month.
Most buyers agree with the purchasing manager of a company that makes sheet metal fabrications for air conditioning, heating and refrigeration products used by the commercial building sector who says that “orders for our products are far and few between.” This has kept him from buying very much steel or other sheet metals.
The latest poll shows that the Purchasing index of buying activity rose to 27.9 in February from 26.2 in January, both up from the bottom of 23.9 in December on the index where a reading at or above 50 is required to show expansion. A typical comment comes from a materials manager at a South Carolina radiator manufacturing plant: “We had a good 2008, but it seems that the poor economy is finally catching up with us this year. Incoming orders are down.”
Over next three months, only 17% of the 576 purchasing professionals polled expect overall buying to increase through May while 99% expect their materials inventory strategy to remain flat or down in the same timeframe. The manager of an industrial packaging plant in New Jersey says that demand is so slow that there is too much inventory for our current business levels.”
Most buyers agree with the purchasing manager of a company that makes sheet metal fabrications for air conditioning, heating and refrigeration products used by the commercial building sector who says that “orders for our products are far and few between.” This has kept him from buying very much steel or other sheet metals.
The latest poll shows that the Purchasing index of buying activity rose to 27.9 in February from 26.2 in January, both up from the bottom of 23.9 in December on the index where a reading at or above 50 is required to show expansion. A typical comment comes from a materials manager at a South Carolina radiator manufacturing plant: “We had a good 2008, but it seems that the poor economy is finally catching up with us this year. Incoming orders are down.”
Over next three months, only 17% of the 576 purchasing professionals polled expect overall buying to increase through May while 99% expect their materials inventory strategy to remain flat or down in the same timeframe. The manager of an industrial packaging plant in New Jersey says that demand is so slow that there is too much inventory for our current business levels.”
Other buyer commentary says that production and purchasing so far this year is even below the recessionary business models prepared for 2009, current purchasing conditions are driving excess inventories back into the supply pipeline and the overall spend on production materials has been reduced as much as feasible. For MRO (maintenance, repair and operations) materials, the purchasing manager of a motor manufacturing plant in Chicago says that “any purchases of indirect materials must be approved by upper management.”
By Tom Stundza -- www.purchasing.com
