Purchasing Managers See Growth, but Fear Future

The economy will steer clear of a recession next year but will grow only moderately, the nation’s purchasing managers predicted today.

Although a recession isn’t forecast, more corporate purchasing executives are worried about economic conditions than ever before in the 27 years the National Assn. of Purchasing Management has asked its members to say how they feel about the future.

“The exceptionally high level of concern about the economy in 1990 is overshadowed by the overall forecast of growth, albeit moderate,” said Robert J. Bretz, chairman of the association’s business survey committee.

Corporate purchasers monitor conditions closely because they must make spending decisions based on assumptions about how business will be, how much inflation will erode buying power and other factors.

The organization’s semiannual forecast, released at a news conference, said 64% of the members expect business to be better rather than worse in 1990 than in 1989.

The forecast said economic growth will average 5% next year, before adjusting for inflation, with the second half of the year improving from a weak first six months. Rising capital expenditures, expanding exports and slowing imports will contribute to the increase in economic output.

Inflation will continue easing next year after turning out to be milder than previously expected in 1989, the group said.

Purchasers said their prices increased an average of 2.6% in 1989, sharply lower than the 5% reported for 1988 and less than the 3.7% increase originally predicted for 1989.