Growth Slowed in February, Report Says

NEW YORK — The economy’s growth slowed in February although exporters continued to show strength, the nation’s purchasing managers said in a report for release today.

The National Assn. of Purchasing Management said its index fell to 54.9% in February from 57.4% in January and was the lowest since a reading of 54.7% in April, 1987.

A reading above 50% indicates that the economy generally is expanding; a reading below that indicates that it generally is declining. February was the 19th consecutive month above the break-even mark.

“Although the growth in the economy in February is still healthy, the pace of that growth is unquestionably slower than we experienced in the fourth quarter of 1987,” Robert J. Bretz, chairman of the group’s business survey committee, said in a statement.

“Nevertheless, despite expected production slowdowns in March, the first quarter’s economy should still register a respectable increase,” he said.

The monthly report is based on a survey of more than 250 industrial purchasing managers who belong to the national organization.

Higher Prices

Of those members whose companies export, 33% said their export orders were higher in February, while 6% said they were lower.

Among other findings of the survey:

Some 31% of the members reported higher levels of new orders, compared with 35% in January and 10% in December.

Production grew strongly, but not as strongly as in the final quarter of 1987. Members who reported stronger production outweighed those reporting weaker, 32% to 9%.

Deliveries from vendors slowed for the 17th consecutive month, but although members continued to be plagued with shortages in certain commodities there apparently were fewer shortages.

Inventories rose slightly, but because inventories traditionally increase at a greater rate in February, the trend actually could be considered a reduction, the report indicated.

Sixty-four percent reported higher prices, just below the 65% who reported higher prices in January, indicating a pickup in inflation. The January figure had been the highest in at least seven years.

Employment grew for a seventh straight month, but not as much as at the end of 1987.

Prices rose for a wide variety of raw materials and fell for only a few, including fuel oil, natural gas and corn syrup.

Products in short supply included steel and other metals and a variety of chemicals.