Manufacturing on the rebound in Massachusetts

The region’s battered manufacturing sector is finally making a comeback as surging demand for technology products boosts orders, profits, and payrolls.

After a long lull, business activity is accelerating to levels not seen since the boom of the late 1990s, executives at Massachusetts and southern New Hampshire manufacturers said in interviews. With orders pouring in, companies are not only gaining confidence that the recovery is at last here, but also doing what they haven’t done in years: hire.

In Worcester, for example, Columbia Tech, a contract manufacturer of technology products such as wireless hardware, has added 75 jobs in recent months to bring employment back to its pre-recession level of about 200 and expects to add more. National Aperture Inc., which employs 35 in Salem, N.H., has added four workers in the last two months, and plans to hire two more as the maker of high-tech optical filters comes off its best quarter ever.

And technology bellwether Teradyne Inc. of Boston has added a few hundred temporary workers to fill orders for semiconductor testing equipment that surged 67 percent in last quarter of 2003 and another 19 in the first quarter of this year. The company last week reported its first quarterly profit in nearly three years.

‘‘It has unbelievably turned around,’’ said Tom Newman, the company spokesman. ‘‘The business is clearly on a tear.’’

A manufacturing rebound is good news for the region’s economy and more evidence that a broader recovery is taking shape, economists said. Since the sector hit bottom in September, Massachusetts manufacturers have added a net 800 jobs, according to the state Division of Unemployment Assistance.

While this pales beside the nearly 90,000 manufacturing jobs lost in the recession, analysts say that even modest improvement in the sector lifts the economy because of its higher wages. ‘‘When manufacturing starts to bounce back, so does everything,’’ said Lori Hock, senior vice president in the Northeast division of Adecco Employment Services, the staffing agency

Hock said her company is now placing manufacturing workers in a variety of companies, including makers of consumer goods, plastics, and technology products and equipment.

‘‘It is a sector that has to recover before the rest of economy does,’’ said Alan Clayton-Matthews, professor of public policy at the University of Massachusetts at Boston.

And the recovery appears underway.

Over the past six months, orders for computers and electronic products grew nationally at an annual rate of nearly 18 percent, while worldwide semiconductor sales jumped at a 41.6 percent annual rate during the same period, according to Clayton-Matthews.

Massachusetts exports of technology products also are up sharply: In the first two months of the year, exports of semiconductor testing equipment grew 36 percent, compared to the same period in 2003, according to the Massachusetts Institute for Social and Economic Research.

Surging demand is even allowing some companies to regain the ability to raise prices, at least to pass on higher costs. Newman, of Teradyne, said customers are no longer trying to squeeze prices down, as they did during the recession, and some have been willing to pay the extra costs of fast delivery of Teradyne’s equipment.

Bud Hawkins, chief operating officer of National Aperture, said his company has raised prices for the first time since 2001, boosting them from 5 percent to 20 percent, depending on the product.

Economists say the return of pricing power also is positive for the recovery, since it means companies can increase profits, which in turn gives them the money to expand and hire workers. It also adds to business confidence, considered a prerequisite to expansion and hiring. And in Massachusetts, confidence among manufacturers recently soared to its highest levels since 2000, according to Associated Industries of Massachusetts.

‘‘We are seeing a recovery in manufacturing,’’ said Andre Mayer, AIM’s senior vice president for research. ‘‘It’s still not good times in any historical sense, but things are clearly looking up.’’

An increasing number of manufacturers agree. Axcelis Technologies Inc. of Beverly, which has added about 100 temporary workers to its Massachusetts workforce in recent months, yesterday reported its highest quarterly profit in three years, on top of a 36 percent year-over-year jump in revenues and 20 percent jump in orders from the fourth quarter of last year. Nancy Connolly, president of Lasertone Corp. of Littleton, said the company, which makes ink cartridges, just completed the best quarter in its 15-year history, and plans this year to add at least 20 employees.

Chris Coghlin, vice president of business development at Columbia Tech, said the Worcester contract manufacturer is showing strength across all of its lines of business, which include wireless hardware, semiconductor equipment, medical devices, and security systems. In addition to the expanding payroll, the company also plans to grow into a fourth manufacturing facility. Said Coghlin: ‘‘We see a robust 2004.’’

Robert Gavin can be reached at rgavin@globe.com.