Positive signs for U.S. manufacturing

April 5, 2012

Companies in the U.S. expanded payrolls in March, showing that the labor market is strengthening, according to data from a private report that studies payrolls.

Overall employment rose by 209,000 for the month, following a revised gain of 230,000 for February, according to the ADP Employer Services figures. Bloomberg reported that faster job growth may lead to gains in wages, something that would help to sustain consumer spending – something that currently accounts for 70 percent of the U.S. economy.

"Labor market conditions continue to improve at a moderate pace," Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, which produces the report with ADP, said in a statement. "Employment grew in all major sectors of the economy tracked."

According to Bloomberg, the data showed that an increase of 45,000 workers was reported for goods-producing industries, which includes manufacturers and construction companies. Employment at factories also rose by a margin of 23,000 workers.

The gains in manufacturing have led to a shift in business strategy for U.S. companies, as they look to hire new workers to fill open positions created by an increased demand for goods in America.

This positive data for the sector, coupled with negative manufacturing news from both China and the UK, has led many to believe that the industry is in the midst of a complete recovery in America. Because of economic stagnation in countries that compete with U.S. industry, manufacturers may be able sustain further gains in the coming months.

Bloomberg, in a separate article, reported that Chinese economic growth was seen as slowing, as the country's gauge for the business climate contracted last month.

According to the news outlet, the gauge reinforces the signs of slowing growth in the world's second-largest economy in exports and manufacturing.

"Overall economic growth is losing some steam as export orders are weakening," Qu Hongbin, chief China economist at HSBC, said in a statement. The drag on industrial-production growth combined with weaker job markets "call for further easing measures."

The UK saw an even larger drop in manufacturing output, as adjusted numbers showed a 1 percent decline in the region for February. This decline was down 1.4 percent when compared with numbers from the same period for the previous year, BBC News reported.