More signs of recovery in manufacturing

Today the Labor Department reported that manufacturers added 17,000 jobs last month, the third straight month of gains. This confirms yesterday's Institute for Supply Management Report that indicated that manufacturers are starting to fill vacancies.

The ISM report also indicated that they saw manufacturing growth in March for the 8th consecutive month--the fastest growth since July 2004. Inventories began to recover as we saw 46 months of liquidation reverse as mid-channel began to rebuild their stocks, suggesting that the wholesale demand is beginning to recover. This trend will further encourage manufacturers to invest in new capacity.

We are already seeing shortages beginning to appear in basic electronic components, with lead times and prices increasing as a result. The ISM survey also reports continued increases in export orders, particularly for machinery to China suggesting a global recovery of investments.

For Industrial Energy Efficiency programs this suggest the time is ripe to engage customers as they begin to plan capacity investments as a sustain market demand begins to manifest itself.