Speed Up That Line!

For the past 18 months, consumers, Wall Street investors, homebuilders, and just about everybody else in the economy have been enjoying a nonstop party. But old-line U.S. manufacturers have been sulking in the corner like wallflowers. The rest of the economy shrugged off the global financial crisis--even profited from it, as prices of all sorts of goods plunged. Meanwhile, manufacturers were pummeled by the collapse of export markets, falling profits, and stock prices that were anything but exuberant. While most companies were scrounging for workers in a tight labor market, manufacturers cut payrolls by some 400,000 workers last year.

Suddenly, however, it looks as if those forgotten goods producers may be joining the fun. On May 5, the Commerce Dept. reported that factory orders in March rose a surprising 2%, and bookings in the first quarter were up 3.6% from 1998. The same day, the Federal Reserve's monthly survey of regional economies found an almost uniform uptick in manufacturing. Add to that low inventories, and the prospects are good for increasing output this summer as business rebuilds stocks. What's more, the crisis in Asia seems to be easing, and in some nations recovery is under way.