Newspaper article THE JOURNAL RECORD

Purchasing Index Declines Sharply

Newspaper article THE JOURNAL RECORD

Purchasing Index Declines Sharply

Article excerpt

NEW YORK (AP) _ The manufacturing sector slumped for the third month in a row in August with employment at the nation's factories falling sharply, according to a widely watched survey of corporate purchasing executives released Wednesday.

"The manufacturing sector is still essentially dead in the water," said Richard Berner, chief economist at Mellon Bank in Pittsburgh.

The index released by the National Association of Purchasing Management dipped to 49.3 percent in August, from 49.5 percent in July. A figure below 50 percent indicates the manufacturing sector is declining.

However, a reading above 44.5 percent usually means the overall economy is growing. With the index averaging 51.9 percent this year, the economy appears to be continuing its slow climb back from the recession.

Economists and the Federal Reserve track the purchasing managers' survey because it is one of the first indicators of economic activity for any month. The survey is considered a good gauge of future business conditions because purchasing managers are responsible for buying raw materials.

The August index was pulled down by the decline in jobs. However, figures for production, new orders and delivery time were marginally higher, leading some economists to predict an upturn this month.

The rate of job-cutting in August was the highest in more than two years in the survey, which polls purchasing managers in over 300 companies. Ten percent reported hiring extra employees in August, while 27 percent said they had job cuts. The rest were unchanged.

"It's discouraging at this stage in our recovery to see this," said Priscilla Trumbull, an economist at Wefa Group in Bala Cynwyd, Pa.

Economists said manufacturing job losses were worst in the aerospace and defense industries, which have been hurt by cutbacks in the airline industry and in government military spending. …

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