Materials inflation accelerates

Raw materials inflation is becoming very worrisome for buyers, according to Institute for Supply Management, whose prices-paid index increased to 73.0 in April from 65.5 in March and 59.0 in February. Readings above 50 point to expansion in activity in the indexes calculated by the purchasing organization. “Prices continue to rise at a rapid rate with metals and energy being the areas of greatest concern to buyers,” says Norbert Ore, who directs the ISM survey.

Purchasing Magazine’s April price-paid index was even higher at 76.4, up from 70.2 in March and 64.2 in February. Also note that Purchasing’s Commodity Price Index of 199.2 in April was the highest since 199.8 of last September.

Commodities showing price increases forISM survey respondents were carbon and alloy steels, aluminum, copper and copper-based alloys, nickel, titanium, (especially plate products), cobalt; such chemicals as caustic soda; natural rubber; corrugated containers, and such energy products as gasoline, diesel fuel, fuel oil and natural gas.

The Purchasing survey in April also found unwelcome advances for these commodities and commentary about higher freight rates and increased prices for flexible packaging materials, solvents, polycarbonate resins, sulfuric acid, components made from wood, auto parts and engine parts. Also bothering buyers are higher prices lately for such electronic components as integrated circuits, capacitors and interconnect devices