Newspaper article THE JOURNAL RECORD

Purchasing Manager Index Rises on Manufacturing Sector Strength

Newspaper article THE JOURNAL RECORD

Purchasing Manager Index Rises on Manufacturing Sector Strength

Article excerpt

NEW YORK (AP) _ The rebound at the nation's factories crept forward last month despite signs that the overall economic recovery remains precarious, corporate purchasing managers said Tuesday in a widely followed survey.

Production and new orders for goods rose in September while the decline in employment slowed, helping to boost an index based on the activities of the purchasing managers to its highest level in nearly three years.

Those expecting vigorous growth were in for a disappointment, said Robert Bretz, who chairs the survey committee of the National Association of Purchasing Management.

But Bretz said the report "certainly was not weak." He said continued growth in new orders from American factories "should be able to sustain moderate growth as the economy enters the final quarter."

The monthly survey is one of the most scrutinized bits of evidence analysts use to gauge the economy's stamina and direction. The survey is viewed by some as a more sensitive indicator than economic figures compiled by the government.

The survey suggests that the "manufacturing side of the economy will do OK," said Mitchell Held, chief financial economist at Smith Barney, Harris Upham & Co., a Wall Street investment firm.

But Held said "the rest of the economy is going through a tough time, and it will continue to be tough."

The purchasing managers said their index of business activity rose to 55 percent last month _ the highest level since December 1988 _ from August's 54.8 percent. A figures above 50 percent generally indicates the manufacturing economy is expanding.

The index, which had remained below 50 percent since June 1990, rose above that benchmark four months ago and has climbed steadily. It is compiled from a survey of purchasing executives in more than 300 industrial corporations.

Bretz, an executive for office machinery giant Pitney Bowes Inc., said the economy "seemingly paused to catch its breath" last month as the recovery stabilized and the rate of growth edged up fractionally.

Perhaps presaging that trend, the government's chief gauge of future economic activity did not budge in August. The Commerce Department said Tuesday that its Index of Leading Economic Indicators had averaged growth of 0. …

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