Pace Eases Up but Economy Is Still Growing : Purchasing Managers Report Strong Exports

The economy continued to grow in March on the strength of exporters, although at a slower pace than the previous month, the nation’s purchasing managers said in a survey released Sunday.

The National Assn. of Purchasing Management said its economic growth index fell to 53.3% last month from 54.9% in February, the lowest since a reading of 54.7% in April, 1987.

A reading above 50% indicates the economy generally is expanding; a reading below that indicates it generally is declining. March was the 20th consecutive month above the break-even mark.

“The economy completed the first quarter with moderate, if not substantial, growth,” Robert J. Bretz, chairman of the group’s business survey committee, said in a statement.

“The healthy increase in new orders, particularly export orders, along with the anticipated slowing of price increases, signals continued improvement in the economy in the second quarter.”

March represented the 15th consecutive month of growth in new orders, according to the survey. Thirty-two percent of the purchasing managers polled reported higher levels of new orders, compared to 31% in February and 35% in January.

Production Growth Slows

Of those whose companies export, 41% said their export orders were higher in March, while 3% said they were lower. That was up from 33% in February and 39% in January.

The monthly report is based on a survey of more than 250 industrial purchasing managers who belong to the national organization.

Among other findings of the survey:

* Production growth slowed from February, although it was at a level still considered very healthy. Members who reported stronger production outweighed those reporting weaker, 32% to 8%.

* Deliveries from vendors slowed for the 18th consecutive month, a reflection of the slowdown in deliveries. Twenty-three percent said they had slower deliveries, compared to 5% reporting faster.

* Inventories declined sharply after growing modestly in the past two months. Twenty-three percent said they had lower inventories, versus 10% who had higher.

* Fifty-five percent reported higher prices, compared to 64% in February, indicating a decline in inflation. Three percent reported lower prices, up from 1% in February.

* Employment grew for an eighth straight month, although the results could be viewed as a slight decline considering normal seasonal increases expected in March.

* Prices rose for a wide variety of raw materials and fell for only a few, including fuel oil, natural gas, diesel fuel and chlorine.

* Products in short supply included aluminum, steel and other metals and a variety of chemicals.