Purchasing index reaches 6-month high

April 02, 1992

The Purchasing Managers Index, a keenly watched harbinger of the nation's industrial activity, rose in March to its highest level in six months, a trade group said yesterday.

The index, one of the first signs of the economy's performance in March, was in line with other statistics showing the economy emerging from recession.

Meanwhile, however, construction spending sagged 0.4 percent in February as hard-hit commercial real estate pulled the entire industry down, the Commerce Department said. The decline came after a 1.8 percent gain in January and masked a comeback in homebuilding.

The Purchasing Managers Index rose to 54.1 percent in March from 52.4 percent in February, the National Association of Purchasing Management said, hitting its highest level since September, when it was 54.3 percent.

The survey polls purchasing managers from 20 industries about orders and planned orders.

"This time the growth in new orders appears stronger and should contribute to increased growth in production," said Robert Bretz, chairman of the group's Business Survey Committee. "Hopefully, this will lead to a more sustainable recovery than in 1991."

Housing is key to an economic recovery, and by many measures -- construction starts, home sales -- the industry started to rebound at a strong pace in January.

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