Purchasers’ Index Jumps in December : Fourth-Quarter Rate of Growth May Have Been Best in 1988--Survey

The nation’s economy closed 1988 with vigorous growth, with December posting the biggest increase in the rates of production and new orders for goods since July, according to a survey of corporate purchasing executives released today.

“December exited like a lion,” said Robert J. Bretz, chairman of the National Assn. of Purchasing Management’s business survey committee. “The continued robust growth capped the final quarter at what could be the strongest growth rate of the year.

“Except for a solid downtrend in the rate of inflation, there were few signs of the anticipated slowing in this, the seventh year of the recovery,” added Bretz, who is director of materials management at Pitney Bowes Inc.

The group’s purchasing managers’ index increased to 58.1% in December, compared to 56.6% in November. The December figure was the highest since July’s 59%. A reading above 50% indicates that the economy is generally expanding; below 50% indicates that it is generally declining.

Index of New Orders Up

The group’s seasonally adjusted production index advanced to 61.3%, compared to 58.2% in November. It was the highest since July’s 62.7%, according to the monthly survey of purchasing executives in more than 250 industrial companies.

The index of new orders rose to 60.1%, up from 58% in November, and the highest since 62.1% in July.

The employment growth rate index slowed only slightly in December to 57.5%. Except for November’s 57.9%, it was at its highest level since December, 1987.

New export orders increased at the highest rate since July after growing at a slower rate for the four previous months, the survey found. Of those members of the trade group who export, 30% reported higher export orders, up from 22% in November. Six percent indicated lower export orders, down from 8% in November.

Vendor deliveries, which indicate whether companies are receiving orders faster than they can deliver them, continued to slow in December, to 54% compared to November’s 52.1%.