Manufacturing Expands for 1st Time in Year

The National Assn. of Purchasing Management said Tuesday that the nation’s manufacturing sector expanded last month for the first time in a year.

The influential business group said its index of business activity rose to 50.2% in April from 48.8% in March, providing the first glimpse of the economy’s performance last month.

A reading below 50% indicates the manufacturing sector of the economy is eroding, while one above 50% suggests it is expanding.

The index last month reached its highest level since April, 1989, when it stood at 52.7%.

“The manufacturing economy inched into expansion territory as it entered the second quarter,” said Robert Bretz, chairman of the association’s Business Survey Committee. “The rebound should be sufficient to sustain solid production growth for several months and buoy the entire economy over the balance of the second quarter,” he said.

The closely watched report by the nation’s purchasing managers--who buy everything from paperboard to polyester to soybean oil at 250 industrial companies--can often send financial markets reeling.

The purchasing managers said their overall index was helped by the biggest surge in new orders since February, 1989.

The most notable gain was from export orders, which increased in April for the 28th straight month.

“The previous signs of leveling-off in the 11-month decline in the economy are even more credible now,” said Bretz.

The index has averaged 48.1% for the first four months of 1990, which is consistent with real economic growth of about 1.3%, he added.

The group’s production index rose for the third straight month, although at a somewhat lower rate than in March.

Its imports index registered 50.5%, unchanged from the past few months.