Manufacturing sector picks up steam

e-mail this story to a friend

The Institute for Supply Management said Monday that all 20 manufacturing industries grew in February, including textiles.

Manufacturers "are particularly encouraged by the increased breadth of the recovery," said Norbert J. Ore, the institute's director.

The institute's index registered 61.4 percent in February, with readings above 50 percent indicating manufacturing expansion.

At the same time, The Conference Board's Help-Wanted Advertising Index, a barometer of America's job market, edged up one point in January. Ken Goldstein, a Conference Board economist, said that want-ad volume signals "that labor market improvements are continuing to develop."

Ore said that "taking into account the fact that all 20 industries reported growth in February, combined with a manufacturing economy that has been growing for the past nine months, it appears that the manufacturing sector has sustainable momentum at this point."

Dr. Rajeev Dhawan, director of Georgia State University's Economic Forecasting Center, said manufacturers will soon conclude the only way to increase future revenues is to "look to new product development, which involves new skills and processes not easily replaced by foreign workers or foreign competition."

The snapshot: "Hiring at the large corporations, which accounts for almost one-half of the job base, is still hard to come by, meaning that we still don't have a stable job market," Dhawan said.

He predicts that nationwide unemployment will fall from 6 percent at the end of 2003 to 5.8 percent this year and 5.6 percent in 2005 as corporations become more profitable, develop new products and expand their payrolls to meet demand for their products.

That may be good news for South Carolina's manufacturing sector. The state lost 19,700 manufacturing jobs in 2003, or 48 percent of all jobs lost. Non-agricultural employment dropped by 41,300 jobs in 2003, from 1.82 million to 1.78 million.

Daniel J. Meckstroth, chief economist with the Manufacturers Alliance, said that manufacturing activity "is generally rising and is clearly sustainable. We predict that manufacturing production growth will be 5.6 percent" in the first quarter, "exceeding the growth rate of the economy at large."

He added that "with jobs coming back and the pick-up in the industrial sector causing slower deliveries and rising commodity prices, these are all signs that manufacturing is on the mend."