Hudson was among those feeling the brunt of the decline, as monthly production of appliances and parts slipped in October, even though economists had been expecting some growth. Hudson's company here builds dishwasher doors, refrigerator hinges, and oven brackets, and when Americans stopped buying new houses in fall 2007, there was suddenly little demand for the trappings of shiny new kitchens. His factories slowly retreated.

As orders from General Electric and Whirlpool trickled to a halt, Hudson absorbed the pain. First, he laid off 40 of his 400 workers. Now he's down to 251. Eventually, he cut his own pay by 20 percent. He stopped 401(k) contributions. This spring, he ran his two huge factories, each about the size of two football fields, with a skeleton crew, as most of the workers took a weeklong furlough. Sales hit a new monthly low - $2.6 million - in March, down from an average high of $5.5 million.

Hudson and his wife, Nancy Hudson, who is the company's controller, were up nights worrying about how they were going to make payroll. "It was devastating," he said. "The orders just stopped."

Even as employers like Hudson find ways to squeeze more productivity out of every worker, the nation's economic recovery so far has not been strong enough to bolster the job market. That helps explain why, despite a 3.5 percent rate of economic growth, the unemployment rate has risen to 10.2 percent and could well approach 11 percent next year.

"The reality is hitting," said Cliff Waldman, an economist at the Manufacturers Alliance/MAPI. "There's a sluggish nature to the recovery."

If people aren't buying, Hudson and others are wary about hiring and investing. So far, his November and December sales look weaker than expected. Instead of planning how to gear up, he keeps working out ways to achieve small efficiencies, making his operations leaner, not larger.

For Hudson, who is president and chief executive of the unusually named Nth/works (motto: "Precision to the nth degree"), everything depends on orders for parts, and right now he has no idea how to predict their volume.

When houses are being built at a steady clip, General Electric and Whirlpool buy plenty of dishwasher doors and refrigerator hinges. But housing starts, a key indicator for Hudson, are weak and probably will not improve soon, economists say.

"It all depends on demand," he said recently. "If it comes back, we'll be hiring people. If it doesn't, we won't. It's that simple."

In March, eight of the 15 plants that Hudson ships to had temporary shutdowns. By summer, he was making 500 dishwasher doors a week, compared with just under 4,000 a year ago. Once, he made 18,000 refrigerator hinges a week. Now, it's 7,500.

"People are cautious," he said. "They're not buying as much, and they're being careful of what they spend money on. If my customers aren't selling these high-end dishwashers, I'm not making the part."

Trying to predict demand depends not only on the construction and remodeling businesses, but also on the competition eager to undercut Hudson.

"We get beaten like a drum on price" in trying to compete with overseas firms, said Doug Hogan, Hudson's sales director. In the last year, Hudson's company has lost 20 of the various kinds of parts it makes for manufacturers in China and India.

So he's trying to keep his factories running smoothly on fewer and less-predictable orders. To become more efficient, he wants to hire a planner to balance sales with his steel inventory. Ordering steel has become a delicate dance. Too much, and it's money spent. Not enough, and orders cannot be filled.

Hudson is keeping his workforce down by giving more training to hourly workers - who represent 11 nationalities and countries including Ethiopia, Vietnam, Iraq, and ones in Eastern Europe - to do more than one job.

He's teaching Toyota-inspired methods to eliminate waste. He's gone from needing five workers to make a dishwasher door to three.

"We're figuring out how to operate with less volume," Hudson said. "We've made the investments to do it."