Midwest and national manufacturing grew in November, reports say

From freezer hinges to ATVs, heavy manufacturing is giving the Minnesota and national economy surprising momentum and fueling optimism that the nation's factories will keep humming into 2014.

Factories making machinery, metal parts, furniture and other long-lasting goods saw product orders jump in November, which helped boost hiring across the manufacturing sector, according to two closely watched reports released Monday.

"The headline is that the numbers are more positive across the whole range" of the manufacturing sector, said Todd Hedtke, vice president of Allianz Life's U.S. investment management division in Golden Valley. "We have been a little surprised at the magnitude of positive sentiment."

Nationally, U.S. manufacturing has grown every month since June, according to the Institute for Supply Management's monthly index. The trade group of purchasing managers said the index reached 57.3 in November from 56.4 in October amid rising product orders and hiring.

News was also encouraging in the Midwest, with Creighton University reporting Monday that its Mid-America Business Conditions Index improved from a disappointing neutral index of 50 in October to a growth index of 51.2 in November.

Any index above 50 signals growth for both the national and regional reports.

The Creighton report found that manufacturers in Minnesota and eight other central states showed a big jump in employment and exports, and a drop in inflationary pressures. The economic growth, however, was credited to factories making durable goods.

At Meier Tool & Engineering in Anoka, president Pete Ollmann said business has returned to where it was prior to the recession. "We are having a good year and we are seeing some growth."

Meier Tool, now a division of Cretex Cos. in Elk River, makes high-precision components for medical, aerospace, defense and specialty electronics markets. Orders are up and employment is stable, Ollmann said. Other firms signaling growth include 3M, Donaldson Co., Polaris, Toro and Valspar.

A flurry of fresh reports is signaling positive change in the local manufacturing scene. Last month, the Minnesota Department of Economic Development and Employment reported that manufacturing jobs surged by 5,300 positions for September and October. That trend appears to have continued into November, according to preliminary findings.

For the nation, the Institute for Supply Management reported growth across several industries, including plastics, rubber, textiles, furniture, paper, metals, transportation equipment, computers and printing. In addition, U.S. manufacturing jobs grew, creating "the highest reading since April 2012," said Bradley Holcomb, chairman of the Institute's Manufacturing Business Survey Committee. Fifteen out of 18 manufacturing sectors grew, giving hope that the worst of the lackluster recovery is behind the nation.

Hedtke, at Allianz Life's $100 billion U.S. investment management division, said the upturn in the U.S. manufacturing mirrors the surprisingly positive employment and consumer confidence reports for October and November, following the end of the federal government shutdown.

He noted that manufacturing is improving in the United States, China and various parts of Europe. "It is starting to pick up and that leads to more risk taking. And I mean that in a positive way," Hedtke said.

Officials from Valspar, Graco and 3M recently noted during their earnings announcements that they are each seeing product demand rise as the housing industry continues its comeback. Valspar enjoyed a sharp rise in U.S. paint sales. And Graco, which makes sprayers, pumps and other liquid handling equipment, reported a sales boost in its most recent quarter amid increased orders from home builders, auto manufacturers and others. 3M also noted that consumer sales and electronic sales rose during its last quarter.

Goss, with Creighton, noted that this is a welcome reprieve for that Midwest-based factories.

"The partial government shutdown combined with pullbacks among firms with ties to agriculture pushed overall economic conditions lower" for October, Goss said. But now, "businesses reported slight job increases for November and holiday buying is now expected to expand by 3 to 4 percent from last year."

Dee DePass • 612-673-7725