Recession Busters: Volume I — Machine Specialties Inc.

By Steve Ivey

The Business Journal of the Greater Triad Area, 27 March 2009

A spot check of Triad manufacturers shows the region may be following the recent glimmer of hope from a national report that found total durable goods orders rose slightly in February.

While Triad manufacturers say their numbers are still lower compared to the same time last year, some say they have seen an increase in their orders over the past few weeks.

The federal government this week said that new orders for durable goods in February increased about $5.5 billion, or 3.4 percent, to $165.6 billion. That data followed a drop in January of 7.3 percent; it also beat most economists’ expectations of a 2.5 percent decline.

February’s rise in manufacturing orders was the first in seven months.

Mike Fahey, vice president of operations at Atrium Windows and Doors in Welcome, said orders have been up about 9 percent during the past four weeks compared to the previous month for the plant that employs about 1,350 people.

Fahey said some of that is because the company’s business is seasonal and naturally increases production when the weather warms up. One of the company’s competitors also went out of business, opening some market share.

But Fahey said he is hopeful the upswing can continue based on the federal economic stimulus package.

“We should see some benefit from the tax credits available for improving energy efficiency of homes,” Fahey said. “We’re a little bit more bullish than we had been.”

Tammy Lowdermilk, vice president of sales and marketing for Machine Specialties Inc. in Greensboro, said her company has recently invested in some new equipment to be able to increase manufacturing capability without using outside processors. As a result, she said the company’s order backlog is at an all-time high.

“A lot of people are holding back because they want to wait and see what’s happening,” Lowdermilk said. “We set a growth plan, and we aren’t going to let the economy slow down our efforts.”

Richard Brenner, CEO of Winston-Salem-based Amarr Garage Doors, said orders for his company have been up in recent weeks as well, though he did not immediately have exact numbers available.

“I think we’re seeing some bouyancy,” Brenner said. “We’re seeing some action in Washington, and whether you like it or not, it’s action. And people are realizing that this looks nothing like a depression, and we’ll pull out of it. Consumers are saving more, but they’re still making smart purchases.”

Cliff Waldman, economist for Manufacturers Alliance in Washington, D.C., wrote a note this week saying: “The February report on durable goods demand is the latest in a recent series of data releases which suggest that the recession-battered U.S. economy may be close to, or at, a business cycle bottom.”