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WASHINGTON (AFP) - A barometer of the US manufacturing outlook shot to a record high in March, and long-depressed factory job prospects improved, a survey of industry executives showed.

The business outlook barometer, compiled from a survey by the Manufacturers Alliance/MAPI research group, edged up one point to 78, the highest in the survey's 32-year history.

Any figure above 50 indicates expanding future activity.

"The significance of the March survey results is that the surprising strength shown in the previous quarter's survey was repeated for a second straight quarter," said Manufacturers Alliance/MAPI economist Donald Norman on Thursday.

"This adds confidence to expectations that manufacturing sector activity will expand in 2004."

The survey also polled executives on the outlook for manufacturing employment.

Over one-third, 36.2 percent, replied that employment would increase moderately or significantly in 2004, compared with 25.9 percent who said employment would fall.

Employment may rise as early as the second quarter, when 27.5 percent of respondents anticipated a moderate or significant bump in hiring, compared with 17.2 percent who expected jobs to shrink, it said.

Factories posted no change in employment in March, according to government data, halting 43 consecutive months of layoffs that had destroyed three million jobs since July 2000.

Overall, US employers added a four-year record of 308,000 jobs in March, the biggest gain since April 2000, as the labor market finally caught up with the rest of the economy.

Latest government figures showed the number of new unemployment benefit claimants dropped 14,000 to a seasonally adjusted 328,000 in the week ended April 3, the lowest since January 2001.

"It is giving support to the belief that we could be starting a period of solid job gains," said Naroff Economic Advisors chief economist Joel Naroff.

A labor market turnaround could be a boon to President George W. Bush (news - web sites), who has weathered heavy criticism from Democratic challenger John Kerry (news - web sites) ahead of the November 2 presidential elections.

Kerry has promised to create 10 million jobs in four years, accusing Bush of overseeing the loss of more jobs than any president since Herbert Hoover, who ushered in the Great Depression of the 1930s.

A breakdown of the Manufacturers Alliance/MAPI barometer showed:

-- The orders index for the first quarter edged up one point from December to 90 in March, indicating accelerating growth.

-- The exports index rose one point to 73, the fourth consecutive quarterly increase.

-- The order backlog index climbed five points to 85, the sixth quarterly rise in a row.

-- The prospective shipments index eased one point to 95.

Last week, a closely watched survey released by the Institute for Supply Management also showed manufacturers boosting activity.

The ISM purchasing managers' index, based on a survey of supply executives, rose 1.1 point from February to 62.5 points in March, the 10th month in a row above 50 points, indicating faster activity.

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