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Manufacturing rises in March
8:41 PM
4/01/04
State Journal, wire reports
NEW YORK - The manufacturing sector continued to rebound strongly in March, an industry group reported Thursday, raising the prospect of more hiring at the nation's factories.
< In Wisconsin, the signs of a recovery are not that clear, said Terry Ludeman, chief of the Office of Economic Advisors in the state Department of Workforce Development.
< The Institute for Supply Management said its manufacturing index registered 62.5 in March compared with a reading of 61.4 in February. The new reading was above the expectations of analysts, who had forecast a figure of 59.5.
< An index reading above 50 indicates expansion, while one below 50 indicates that manufacturing activity is contracting.
< The ISM report, and another by the Labor Department on Thursday showing new claims for unemployment benefits declined slightly last week, suggest the job market may be improving.
< "Almost all the indicators . .. point to a healthy rebound in manufacturing, which has been the Achilles heel for the economy in the past three years," said Sung Won Sohn, chief economist for Wells Fargo & Co. "Even employment seems to have rebounded very nicely in the ISM report, indicating that businesses are producing in order to meet demand."
<In Wisconsin, anecdotal reports indicate jobs may be picking up a little bit, said Jim Haney, president of Wisconsin Manufacturers and Commerce. "I have heard from several contractors that their orders for work are increasing from manufacturers, suggesting that some expansions or additions are being done, some plant renovations and so on," Haney said. "And that may be a sign that employment is just around the corner."
< At the same time, though, plant closing announcements keep rolling in. The Eau Claire area learned this week that two factories Rockwell Automation and Celestica and the American Girl call center will close, ending about 500 jobs, in all.
< "It was quite a shock and very disappointing," said Mike Schatz, economic development administrator for the city of Eau Claire. Another plant, Intek Plastics, closed Wednesday, ending 65 jobs.
< "Most of these (were) tied to cost-cutting measures by companies that had little to do with the environment here in Eau Claire," Schatz said.
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< Analysts said the ISM report shows the manufacturing sector has sustained momentum, with new orders strong, backlogs of orders increasing and production ramping up.
< The report coincided with the government's tally Thursday of new claims for unemployment benefits, which edged down last week by a seasonally adjusted 3,000 to 342,000.
< The government also reported that construction spending dipped 0.1 percent in February.
< Wholesale prices also moderated in February, edging up 0.1 percent after a 0.6 percent rise in January. The new report shows inflation remains in check, even as the economy grows.
< All of the 20 industries that comprise the manufacturing sector reported growth, ISM reported.
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