Economy Edged Up in September, Survey Says

The economy expanded slightly in September as production rose from an already high August level, the National Assn. of Purchasing Management said Sunday.

The report, based on data compiled a survey of purchasing managers in 250 industrial companies, said the gain in production was expected because new orders increased significantly in August and again last month.

That means production should be healthy in the months ahead, the association’s monthly report said, but the percentage of the group’s members reporting a rise in prices rose sharply, to a level not seen since August, 1984.

Inventories declined again, but the rate of decline was lower for the third consecutive month, the group said. Employment remained at a depressed level, it said.

“In September, the economy continued the expansion registered in August, which reversed the downtrend in three of the four previous months,” said Robert J. Bretz, the committee’s chairman and director of materials management for Pitney Bowes Inc.

More New Orders

“The high rate of new orders in September should mean healthy production levels in October and November, and a continuation of the expansion,” Bretz added.

The purchasing managers’ composite index rose to 53.2%, up slightly from 52.6% in August. This was the second consecutive month and the sixth time this year that the seasonally adjusted indicator registered over 50%.

Such a reading generally indicates that the economy is in an expanding phase, the group said. A reading below 50% indicates that it is generally declining.

The group said 35% of those surveyed reported a gain in new orders last month, compared with only 15% reported a decline. The net difference--plus 20%--was the highest since February, the association said.

Twenty-seven percent reported that production at their companies had increased, the same as in August, while 13% reported decreases in production, the report said.

The 19% reporting higher prices in September was more than three times the number reporting lower prices, 6%. That 19% was the highest since September, 1984 and suggests the economy may support price increases, the association said.

Higher Fuel Prices

Fuel oil prices also were reported higher, reversing an eight-month downtrend, the association said.

Once again, more than twice as many members reported employment down at their companies, 27%, than those who reported increases in employment, 13%, it said.