McHenry County manufacturers see production pick up

CRYSTAL LAKE – Inside its Crystal Lake facility, Technipaq has emptied a 4,500-square-foot portion of its warehouse, as the medical packaging products manufacturer makes room for expanded operations.

By summer’s end, the empty warehouse space will feature new equipment and employees working to make Technipaq’s preformed pouches, a product line that represents 70 percent of the family-owned company’s sales and safely packages medical equipment for the health care industry.

The flexible packaging maker has planned the expansion for nearly two years, starting after the company acquired a 45,000-square-foot warehouse in Cary meant to house supplies from its manufacturing plant in Crystal Lake, said Brian Rosenburg, vice president of marketing and sales.

The expansion rollout came at the right moment for Technipaq. Finishing off a record month for sales in May, the company has seen overall sales up 13 percent from last year, Rosenburg said, at a time when manufacturers across the country are growing.

“We are seeing people replenish inventory but also expand their businesses. We are picking up their growth, as well as some new business, with new projects that people have budgeted to finish,” Rosenburg said. “We think this will be a really strong year for us.”

Spurred by increased new orders and hiring, U.S. manufacturers saw growth accelerate in May for the first time in six months, increasing confidence that the economy may be on the upswing after shrinking in the first three months of the year.

The Institute for Supply Management, a trade group of purchasing managers, reported earlier this month its manufacturing index increased to 52.8 last month from 51.5 in April.

Any reading above 50 signals activity expansion within the manufacturing sector.

The institute’s metrics on new orders and employment also rose from its April readings, along with a jump in order backlogs – a sign that production could increase in the coming months.

Technipaq and other manufacturers in McHenry County experienced similar trends, starting 2015 off slow but seeing orders pick up during the April-June quarter.

Even as overall growth remains limited, the Crystal Lake packaging products maker that employs 165 people is looking to hire as many as 15 new full-time employees.

About half of the planned hires are a direct response to the improved sales in 2015, Rosenburg said.

The other hires would staff Technipaq’s expanded manufacturing operations, he said.

Located east of downtown Crystal Lake, Autotrol Corporation added six full-time employees within the last month, as the small electric motor maker starts to see increased production activity, Chief Financial Officer Roger Wolfe said.

Although optimistic, the motor manufacturer remains cautious about the economic outlook in 2015, as overall growth in the U.S. economy continues to ebb and flow.

Despite manufacturing activity trending upward across the country, the Chicago region saw activity shrink from April to May, based on the Chicago Business Barometer, a regional economic indicator that surveys Institute for Supply Management members in Chicago.

Propelled by a 13.8 percent decline in new orders, the Midwest indicator fell well below the institute’s neutral rating, dropping 6.1 percentage points from April to 46.2 last month.

Members surveyed did indicate the May dropoff may not have been widespread across all manufacturing sectors, although the reading suggests sluggish manufacturing activity has continued into the second quarter of the year, according to the Chicago report.

“The economy in general is starting to improve. We see some light at the end of the tunnel,” Wolfe said. “Whether it has legs or it’s a meaningful increase that is going to stick? I don’t know.”

• The Associated Press contributed to this report