Purchasing Managers See Rise in Growth : New Export Orders Drive Up April Index

The economy rebounded in April, growing much faster than the languid pace of March due to a sharp rise in exports, according to the National Assn. of Purchasing Management. The April purchasing managers’ index rose to 53% from 50.4% in March. It was the 33rd month in a row that the index has been more than 50%, the dividing line at which the economy is growing or contracting.

“The economy entered the second quarter on a higher note than it ended the first quarter,” said Robert Bretz, chairman of the NAPM’s business survey committee.

Bretz said a “surprising increase” in new export orders appeared to have fueled the brisk rebound from March’s sharply lower growth. “Nevertheless, most other indicators signal a moderate rate of growth in the economy in the months ahead,” said Bretz, who is also director of materials management at Pitney Bowes Inc.

Highest Since December

New export orders increased at their highest rate since December after posting three consecutive months of lower growth rates. Of the 67% of NAPM members who export, 28% reported better export orders, up sharply from 22% in both February and March.

The 4% reporting worse export orders was down from 9% in March.

The NAPM’s Report on Business is based on monthly replies to questions asked of purchasing managers in over 250 industrial companies. The index is based on five indicators: new orders, production, vendor deliveries, inventories and employment.

The purchasing managers’ index averaged 52.4% in the first four months of 1989. If that average were to continue for the rest of 1989, it would mean total economic growth of about 2.5%, or about the same as in the first quarter, the NAPM said.

Employment Down

Both production and new orders posted increases after registering lower rates of growth in March. Inventory buying did not fuel the gains since that fell for the fourth month in a row, the NAPM said.

Employment fell for the third consecutive month. The employment index was 49.2%, versus 49.4% in March. That was the lowest in a year, reflecting the caution with which managers view the slowing economy, the NAPM said.