By Paul Davidson, USA TODAY
Manufacturers emphatically defied Friday’s lackluster employment report, adding 49,000 jobs last month in what some economists say should signal the start of a surge for the beleaguered industry.
The job gains were the most by manufacturers since August 1998. More impressive, they came despite an otherwise disappointing report that showed employers added a net total of 36,000 jobs in January, far fewer than the 146,000 expected.
Strong job gains by U.S. factories would be a welcome boon to a sputtering job market. Makers led a modest jobs rebound early last year as firms replenished stocks depleted in the slump. But it petered out in August after shelves were refilled and substantially higher customer demand didn’t materialize.
Higher demand is finally kicking in, particularly in emerging markets, says economist Cliff Waldman of research group Manufacturers Alliance/MAPI. And productivity gains that let makers put off hiring last year amid economic uncertainty are wearing thin.
After adding 112,000 jobs in 2010, producers are projected to add 275,000 this year and 300,000 more in 2012, according to the alliance. That would offset some of the 2.3 million losses in the downturn. Those layoffs “were clearly overdone,” Waldman says.
Yet don’t expect the industry to reclaim its former employment. The industry lost nearly 4 million jobs in the 10 years prior to the recession due to technology advances and the flight of jobs to countries with lower costs. Waldman expects those trends to continue.
Last month’s job gains were by makers of durable goods, such as cars, factory gear, metals and computers, much of them exported to overseas businesses. Makers of non-durables such as apparel, food and paper shed 13,000 jobs amid still moderate U.S. consumer demand, Waldman says. Some hiring:
•After keeping its 192-worker staff stable the past few years, Atlas Machine & Supply in Louisville added 10 workers the past 90 days and last month converted two temporary employees to full time. The industrial parts maker increased overtime last year. But Atlas President Rich Gimmel says, “You reach a point of diminishing returns when you work 70, 80 hours a week.” Plus, “The recovery seems to be getting some legs.”
•Ford Motor added 600 workers in Ohio and Michigan since November to speed production of vehicles and engines, spokeswoman Marcy Evans says. U.S. car sales rose to an annual rate of 12.6 million last month from 11 million early last year.
•No. 1 aluminum maker Alcoa said last month it’s re-opening three U.S. smelting plants this quarter that will employ 260. “We see more demand going into aluminum,” CEO Klaus Kleinfeld says.
•Top chipmaker Intel added 3,000 workers last year, about double projections, as demand for servers and notebooks surged.