NAPM reports show that business activity slowed in November
The monthly surveys that the National Association of Purchasing Management (NAPM) compiles for both the manufacturing and nonmanufacturing sectors of the economy suggest that fourth-quarter 1998 GDP growth was considerably lower than the third quarter's 3.9% rate. Preliminary figures on total economic activity in last year's final three months will be released on January 29th.
The NAPM's nonmanufacturing index of business activity slipped to a level of 53 in November -- a full six points lower than in September. And the closely-watched NAPM manufacturing index dropped to a much weaker 46.8 in November. This figure was 2.6 points lower than in the final month of the third quarter, and the sixth consecutive month of a reading below the neutral level of 50. Neither index comes close to signaling an impending recession, but both point to much more subdued growth in our future.
The nonmanufacturing survey found 26% of business reporting increased business activity in November, while 22% of manufacturing firms indicated that production expanded between October and November. New orders also improved for 26% of nonmanufacturing sector respondents versus only 19% of manufacturers. Price pressures were minimal in both surveys, with 5% of nonmanufacturing companies and only 2% of manufacturing firms reporting that, on average, they paid more for purchased goods and services in November than in October.
Change in business activity in 1998
Month Manufacturing Nonmanufacturing
January 52.4 57
February 53.3 58.5
March 54.8 59.5
April 52.9 63
May 51.4 64
June 49.6 61.5
July 49.1 57.5
August 49.4 52
September 49.4 59
October 48.3 53.5
November 46.8 53
Source: National Association of Purchasing Management
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