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Slow Recovery: ‘Confidence Coming Back’

Manufacturing jobs, venture spending, hours worked on rise

Grant Bennett first sensed economic recovery might be on the way when he started getting calls early last month from clients placing orders for more of his company’s metal products.

The calls increased in number and soon Bennett’s Norton-based CPS Technologies was ramping up its manufacturing facilities. CPS, maker of metal plates and lids for electronic equipment, hired 15 people to meet demand.

“We are working overtime and hiring more,” said Bennett, chief executive of CPS Technologies.

Bennett’s firm, founded in 1984, may represent a small microcosm of a larger economy that some observers say is now showing signs of recovering from the Great Recession.

Last week, the state reported that the Massachusetts jobless rate had jumped in December to 9.4 percent, up from 8.7 percent in November. The numbers clearly showed that workers are still taking it on the economic chin here.

But economists say employment is growing in key sectors in Massachusetts, suggesting that the economy may be close to actually generating jobs.

The biggest surprise in the jobs report was that the manufacturing sector, which includes Bennett’s firm, is slowly expanding. State data shows that manufacturing companies have posted a net increase in jobs over the past two months.

Some firms are hiring, recalling temporary workers or just rolling back mandatory part-time hours that were imposed during the depth of the recession.

Worcester’s Lutco Inc., a maker of ball-bearing assemblies for the trucking and agriculture industries, is one of those companies.

Lutco imposed a four-day work week for its employees last summer when demand for its products hit bottom. But a few months ago, due to increased demand from customers, a five-day work week was reinstated to increase productivity.

“It’s not a dramatic increase - everyone’s still very cautious,” said John Stowe, chief executive of Lutco. “But it’s getting better. Things will not improve rapidly. I think they’ll improve slowly.”

There’s other evidence of economic expansion - and possibly more jobs and increased pay for workers on the way.

The Federal Reserve earlier this month said its most recent survey of employers in the Boston area showed many have plans to either add jobs or increase the hours and pay of those already on payrolls.

Venture capital firms meanwhile have been pumping millions into area technology firms - even as venture capital spending is decreasing nationally - suggesting growth in those cutting-edge areas locally as well.

Separately, another survey released last week showed that 42 percent of small and medium-sized firms in New England are now planning to hire workers in 2010, up from 29 percent a year earlier. The upbeat survey was conducted by the Smaller Business Association of New England and Insight Performance Inc., a human resources consulting firm.

Nancy Mobley, chief executive of the Dedham-based Insight Performance, said it’s not only her clients and those surveyed who are talking about hiring workers.

“We’re hiring, too,” said Mobley. “Anecdotally, the confidence is coming back, though it’s not flaring back. Not everyone is going crazy. I don’t want to paint that picture. But things are improving.”

Lynn Tokarczyk, president of a Medway consulting firm specializing in helping firms take advantage of state tax incentives, said more out-of-state firms are contacting her about stepping up operations in Massachusetts. “Expanding wasn’t on their radar screen a few months ago, but now they’re thinking differently,” she said.

Business executives and economists stress the economy is still fragile - and there are some concerns that continued high unemployment will wear down the slight expansion under way in some sectors.

Others fret that increased demand for products may be a sign companies are only temporarily replenishing inventories that were drawn down during the depths of the recession.

But at least the word “hiring” is finally being whispered in some quarters again, economists and business leaders say.