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Manufacturing sector slows
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September 2, 1997: 10:43 a.m. ET
Purchasing Managers Index drops slightly in August to 56.8 percent
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NEW YORK (CNNfn) - Economic activity slowed in the United States in August, the National Association of Purchasing Management said Tuesday.
The NAPM said its National Purchasing Managers' index decreased to 56.8 percent in August from 58.6 percent in July. A reading above 50 percent indicates the economy is expanding and a result below 50 percent indicates a contracting economy.
The slowdown, which was slightly lower than economists' expectations of 57 percent, was partially the result of delivery delays due to the Teamsters union strike against United Parcel Service, the NAPM said.
However, it was still the fifteenth consecutive month the index has indicated manufacturing growth. The news strengthened the bond market, with 30-year Treasury bonds rising 11/32 to push the yield back to 6.33 percent.
The NAPM's production index retreated in August, falling to 62.4 percent from 64.4 percent in July.
The group's inventories index declined in August to 42.8 percent from 46.5 percent in July due to a faster rate of inventory reduction.
The new export orders index declined 1.2 percentage points to 55.9 percent while imports of materials by manufacturers increased more quickly as the imports index rose to 54.7 percent in August from 53.2 percent in the previous month.
"The overall picture in August as indicated by growth in production, new orders, and backlog of orders is one of continued growth in manufacturing activity," explained Norbert J. Ore, chairman of the NAPM survey committee.
"The rate of growth of new orders and production is strong while prices were up for a number of commodities, with eleven industries reporting that they are paying higher prices."
Fifteen of the 20 manufacturing industries surveyed reported improvement, including paper, petroleum and printing and publishing.
The manufacturing employment index grew for the sixth consecutive month to 52.0 percent from 50.7 percent the previous month.
-- Randy Schultz
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NAPM
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