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Manufacturing Economy Continues To Contract

Compiled By Gina Protopapa Economic activity in the manufacturing sector declined in March for the eighth consecutive month. The overall economy, however, grew modestly, according to the latest Manufacturing NAPM Report On Business. The National Assn. of Purchasing Management's (NAPM) Purchasing Managers' Index (PMI) was 43.1% for March, an increase of 1.2 percentage points from February's 41.9%. Though an improvement over the previous month, this reading indicates that the manufacturing sector again failed to grow. A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting. "The manufacturing sector . . . appears to lack drivers sufficient to stimulate recovery," says Norbert J. Ore, chair of NAPM's Manufacturing Business Survey Committee. "Petroleum-based products have apparently stabilized enough to relieve major upward pressure on prices; however, manufacturers are still concerned about energy costs for natural gas and electricity. "Reductions in manufacturing employment continue, but at a slower rate," adds Ore. Only three of 20 manufacturing industries reported growth: miscellaneous (jewelry, toys, sporting goods, musical instruments); instruments and photographic equipment; and chemicals.

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