Manufacturing Growth Jumps

U.S. manufacturing expanded in January to the healthiest level since 1988, according to a survey released Monday.

The National Assn. of Purchasing Management’s monthly assessment showed surging production and the biggest growth in new orders since 1983. It also showed growing order backlogs and shrinking stockpiles--indications that U.S. factories face difficulty satisfying demand for their products.

The survey provided evidence that the economic recovery, by official reckoning now more than 21 months old, faces little danger of stumbling despite layoffs and cutbacks announced recently at some of the country’s biggest corporations.

The purchasing managers index, a monthly calculation based on the survey results, jumped to 58.0 in January from a 55.4 reading in December, 54.7 in November and 50.7 in October. It was the highest reading for the index since a 58.2 reading in July, 1988.

An index figure exceeding 50 indicates the manufacturing economy is expanding, while a reading below 50 indicates a contraction. Over prolonged periods, an index figure exceeding 44.5 shows an expansion of the overall economy. The index averaged 52.7 for all of 1992.

In a separate report, the Commerce Department reported that construction spending rose 6.2% in 1992, the largest increase in six years.

But it remained unchanged in December after three monthly increases, and the October and November increases were revised downward substantially.