NEW YORK, SEPT. 7 -- The nation's economy continued to strengthen in August, as new orders and employment increased and the rate of production hit its highest pace since April, a trade group said today.
The National Association of Purchasing Managers said its monthly indicator of future economic growth stood at 59.9 percent, up from 58.2 percent in July and the highest since April 1984, when it reached 61 percent.
It also said the number of price increases reported exceeded the number of price decreases for the 12th straight month.
"Production was exceptionally strong, considering the normal seasonal slowing, and appeared to be aided by some inventory buildup," said Robert J. Bretz, chairman of the group's Business Survey Committee. "The continued rise in new orders virtually assures an excellent third quarter."
Bretz said the group's monthly index has averaged 56.1 percent for the first eight months of the year.
If this average were to continue for the remainder of 1987, he said, it would be consistent with a real growth of 3.7 percent in the nation's gross national product.
The group, which has about 30,000 members, compiles its business indicators in a monthly survey of purchasing executives at 250 industrial companies.
In the August survey, the group found: New orders rose, though not as quickly as in July. It was the eighth consecutive monthly increase, with 36 percent of the respondents reporting more new orders and 13 percent reporting fewer. Production also rose for the eighth straight month, with 33 percent of the respondents reporting higher production and 8 percent lower. The margin was up 15 points in July and up 19 in June. Vendor deliveries slowed for the 11th straight month, indicating that orders are outrunning companies' ability to fill them. Two percent of the respondents reported faster deliveries, while 20 percent reported slower. Inventories grew for the third time in four months, with some respondents citing slow deliveries as the reason, and others saying they were stocking up to avoid price increases.