Manufacturing Sector Shows Signs of Upturn --- Purchasing Group's Index On Orders, Output, Jobs, Rose to 51.1% for June
WASHINGTON -- The nation's beleaguered manufacturing sector showed more signs of emerging from its long slump, according to a closely watched report by the National Association of Purchasing Management.</br></br>An index compiled by the group, based on orders, production, employment and other indicators of manufacturing health, rose to 51.1% in June from 50.7% in May. That marks the third consecutive month the index has registered above 50%, and the association says any reading above 50% means the manufacturing economy is "generally expanding." From May 1989 through March 1990 every monthly reading was below that threshold.</br></br>The index is based on a survey of purchasing executives in about 300 companies across the country, but economists and the financial markets pay considerable attention to it because it is often the first published report of economic activity for any month.</br></br>After seeing the index yesterday, Norman Robertson, chief economist at Mellon Bank in Pittsburgh, said, "I think all the evidence would now point to a slow, sluggish rate of improvement in the manufacturing sector."</br></br>Manufacturers, particularly makers of cars and other big-ticket items, have been among the hardest hit by the Federal Reserve's efforts to fight inflation by holding interest rates high. But though recent economic indicators -- including durable-goods orders and the government's index of leading indicators -- have suggested manufacturing may be picking up strength, other sectors of the economy still seem to be flailing.