"Manufacturing Sector Still Growing" [price rises accelerate]
Filed at 12:17 p.m. EDT
NEW YORK (AP) -- The nation's
manufacturing sector continued to expand for
the third straight month in April, but the
growth was less robust than in the previous
month, corporate purchasing executives said in
a survey released today.
The National Association of Purchasing
Management reported its monthly index of
business activity fell to 52.8 percent, down 1.5
percentage points from its March level.
''The manufacturing sector continued to
improve in April. Both production and new
orders remained positive and it appears that the
manufacturing sector has significant
momentum, with a much broader base of
growth this month as 16 of 20 manufacturing
industries were above the break-even line (of
50),'' said Norbert J. Ore, chairman of NAPM's
Business Survey Committee.
The NAPM considers any reading above 50
percent as a sign of growth in the industrial
sector.
The organization assesses the health of the
nation's factories, and in turn the overall
economy, through a monthly survey of its
members. The trade group's findings are
widely followed by economists including
Federal Reserve Board Chairman Alan
Greenspan because they usually are the first
indicator of how the economy performed in
the just-ended month.
Prices jumped 6.7 percentage points to 49.9
percent, but still remained below their
December 1997 level. That marks the fourth
straight increase in the prices index and was
the largest jump since May 1996, said NAPM
spokeswoman Zenobia Daruwalla.
The rebound in prices has sparked concerns
about inflation and tempered any boost the
overall survey might have given the markets,
said William Sullivan, senior economist with
Morgan Stanley Dean Witter.
''It represents a change and we have to be
watchful. Clearly there is some cause for
concern,'' Sullivan said. ''The real question is
have we turned around to point toward rising
inflation or is the economic environment so
different, that a modest increase doesn't have
any influence on broad economic trends.''
While a halt of falling prices could signal a
change in the economy, Ore said other signs
point toward continued growth.
The strengthening of an order backlog index --
up for the second month in a row -- indicates
manufacturing activity will continue to grow in
the next two months, he said.
''The overall picture is one of continuing
growth in manufacturing activity during the
month of April,'' Ore said. ''Production and
new orders remain quite positive and provide
an indication that the manufacturing sector is
gaining strength as we move toward the middle
of 1999.'' |
