In Wisconsin, Hopeful Signs for Factories

[pampango]

Source: New York Times

MEQUON, Wis. — At the Rockwell Automation factory here, something encouraging happened recently that might be a portent of national economic recovery: managers reinstated a shift, hiring a dozen workers. After months of layoffs, diminished production and anxiety about the depths of the Great Recession, the company — a bellwether because most of its customers are manufacturers themselves — saw enough new orders to justify adding people.

Rockwell Automation’s machinery, computer software and know-how form the guts of assembly lines in a wide array of industries. “The products they produce through the whole range are critical for doing manufacturing,” said John S. Heywood, an economist at the University of Wisconsin, Milwaukee. .

Though manufacturing has diminished as a share of the economy, it still employs 11.7 million people, and it tends to trace the ups and downs of broader business prospects, making it a useful indicator of overall economic vigor. Wisconsin is an ideal laboratory in which to assess manufacturing. No other state has a larger share of its jobs in manufacturing — more than 17 percent, according to the Labor Department. Today, that translates into a palpable lack of security.

In recent months, Rockwell has suffered along with much of American industry. As car sales plummeted, automakers canceled new orders for Rockwell’s machinery. As the price of oil plunged this year, energy companies scrapped expansion plans, eliminating demand for Rockwell’s machinery. Rockwell began large-scale layoffs in October 2008 — three percent of its 20,000-plus workers worldwide, including 300 in the United States. Scattered layoffs continued in the months after. The company also cut working hours, trimmed wages and eliminated its own contributions to employee retirement accounts.

Read more: http://www.nytimes.com/2009/09/13/business/economy/13manufacture.html?_r=1&ref=global

---

A tiny "green shoot" but at least one in the sector that makes the stuff that manufacturers use to make stuff. Still not a very optimistic outlook. Without consumer spending coming back, factories like this won't have that many manufacturers to sell their stuff to.

[Zynx]

1. Production is currently insufficient to keep up with even current consumption.

There could be decent growth in production for a little while given that personal consumption is flat rather than falling significantly at present. FYI, don't look at y/y numbers but rather the q/q numbers. Looking at y/y is precisely how economists missed some of the early signs of the Depression because y/y the numbers were often still positive while m/m or q/q they were starting to drop off.

[HamdenRice]

2. The doomers and "let it failiers" are not gonna like this one bit, not one bit, I tell ya

hence the furious unrec'ing.

[amandabeech]

3. Well, this doomer LIKES seeing signs of economic life,

particularly in manufacturing.

The rec counts stands at +7 at 12:57 pm on Sunday.

[midnight]

4. Kicking for Wisconsin.