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Exports Expected to Lead Strong U.S. Growth in '88

December 09, 1987|Associated Press

NEW YORK — The economy will grow solidly next year despite the impact of the October stock market crash, largely because of strength in export businesses and only mild price increases, the nation's purchasing managers reported Tuesday.

"Overall, purchasing managers were pleased about 1987 and approach the new year with optimism, although it seems tinged with a degree of concern," the National Assn. of Purchasing Management said in its semiannual economic forecast.

"By a ratio of four to one, they predict 1988 will be better than 1987," the forecast said.

Members reported that their companies were operating at the highest percentage of capacity since May, 1979, and indicated that the fourth quarter of 1987 will be better than the third, the forecast said.

They also predicted favorable Christmas sales, despite fears of a consumer slowdown in the aftermath of the stock market crash in October.

"The present growth in the economy is expected to continue into the first quarter of 1988 and then accelerate in the second, spurred by increasing capital expenditures and significantly expanding exports," the forecast said.

Robert J. Bretz, chairman of the association's business survey committee, said that while purchasing managers "are concerned about the impact of the recent stock market decline on the economy, their optimism is fueled by significant increases in export business."

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