Last week ended with some cheering economic news: the total U.S. economy grew by 5.7% in the fourth quarter of 2009 versus the third quarter. It was the fastest rate of quarterly growth since 2003, and indicators show it was largely the effect of inventory restocking. This is an additional hopeful sign, as it means manufacturers see a need maintain a higher level of readiness for business improvement.

But, there is trouble in the supply chain: MFG.com, an online marketplace for the manufacturing industry, reports that over one third of North American manufacturers it surveyed have experienced “significant supply chain disruption” over the past three months. It’s the second straight quarter for such a response.

Also worrisome: the respondents’ expectations for capacity and employment growth have not materialized.  In October 2009, the MFGWatch survey found 62% of respondents expected to maintain operating capacity in the fourth quarter, but in the more recent survey only 34% said they had done so.

As for employment, 13% of manufacturers stated in October that they anticipated staff reductions, but 38% actually reduced their employment levels.

MFG.com conducted its latest two-part survey in early January 2010, targeting North American supply-side manufacturers and buy-side OEMs: 334 manufacturers, purchasing pros, and engineers in automotive, aerospace, medical, industrial equipment, consumer products and textiles responded.

“Manufacturing continues to lag behind other sectors in the American economy -- and of all the challenges we face, employment appears to be the most serious at the moment,” said Mitch Free, founder and CEO of MFG.com. “While there are opportunities, and the national debate is focusing more on manufacturing’s role in our economy, it will be difficult to take full advantage until we revitalize manufacturing investment and stimulate growth.”