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Improving economy lifting local, national manufacturing
Factories step up hiring, production in March
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Northeast Georgia manufacturers are riding a national trend of increased production and hiring.

Reports show that manufacturing rose nationwide in March and hiring in the sector also is up.

Meanwhile, local business leaders say local manufacturing is looking good, too.

“We have seen a steady uptick in growth both in production and hiring,” said Shelley Davis, vice president of existing industry for the Hall County Chamber of Commerce.

As evidence, Bitzer, which manufactures compressors for commercial refrigeration and air conditioning, broke ground to expand its Oakwood facility on Monday. That expansion is expected to allow the company to add 50 new employees over the next two years.

On a national scale, the Institute for Supply Management, a trade group of purchasing managers, said Monday that its index of manufacturing activity rose to 53.4 in March. That’s up from 52.4 in the previous month. Readings above 50 indicate the sector is expanding.

A measure of employment in the sector rose to a nine-month high, a sign that factories are stepping up hiring. Manufacturers have already been a big source of job gains lately. They’ve added more than 100,000 jobs in the past three months, about one-seventh of all net gains.

Increasingly confident U.S. consumers and businesses are spending more on cars, machinery and other goods, pushing up factory output. A gauge of production rose to its highest level in three months in March.

Consumers increased their spending in February by the most in seven months, the government said Friday. That is raising expectations the economy will grow a bit faster in the current quarter.

Consumer spending on long-lasting goods, such as cars and computers, rose 1.6 percent in February. That suggests manufacturers will have to increase output to meet higher demand.

Manufacturing has been a key source of economic growth since the recession ended in June 2009. The sector has expanded for 32 straight months, according to the ISM’s index.

Rising factory output is helping the broader economy grow. Growth increased to a 3 percent annual rate in the final three months of last year, up from 1.8 percent in the previous quarter.

Many economists expect growth will slow in the current quarter because companies aren’t likely to restock their shelves as much as they did in the fourth quarter. But after Friday’s report on consumer spending, some analysts are boosting their estimates for growth in the January-March quarter to 2.5 percent, from 2 percent.

But few in the sector are ready to declare that the economy is fully on the road to recovery yet.

Phil Sutton, a spokesman for tractor manufacturer Kubota, said production in Gainesville was also up slightly in March over the previous year. However, he said, the numbers still aren’t close to levels the company enjoyed in 2007 and 2008.

He said his outlook on current economic conditions is “cautiously optimistic,” with other factors like the housing market and tax reform determining factors yet to be resolved.

That phrase is going around a lot these days about the state of the economy.

Rather than expansion fueled solely by demand, Sutton observes that recent local plant openings and expansion seem to largely be coming from international companies that are finding it makes more financial sense to move production for goods intended for U.S. markets to the states.

Kubota’s expansion into Jefferson, a $73 million investment, is part of that effort. The company is moving more of its tractor production for North American consumers to Georgia from existing factories in Japan and Thailand. That’s expected to help the company save on international exchange rates and shipping costs.

The Associated Press contributed to this story.

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