Recalls of products made in China pave the way to growth.

China’s misfortune may turn out to be Sue Dennison’s holiday gift. The co-owner of Roy Toy, in East Machias, Me., has seen website sales and wholesale orders for her log-building sets soar in the past few weeks, and she’s shipping to U.S. retailers that are further away than ever before. “We’ve written more orders over the last few days than we did for the first and second quarter of 2007,” says the manufacturer, who is going to add colorful “Made in the U.S.A.” stickers to her packaging to ensure that every customer knows the origin of her toys.

With plans to triple production over the next few weeks Roy Toy, which sells its wares through retailers such as L.L. Bean and small specialty stores, is gearing up for a strong holiday season. To do this, Dennison needs to find more workers so she can increase her packing team from 10 part-timers to 40 full-timers. “I don’t know how easy that’s going to be in Washington County, Maine!” she says.

Dennison is one of many specialty toy manufacturers who expect to see a bump in sales because of increased customer demand for playthings made in the U.S. The lead-contaminated paint recently found on recalled, Chinese-made products from toymaker giants such as Mattel Inc. and RC2 Corp., has left consumers worried about children’s safety. And big retailers are paying attention. Kathleen Waugh, a spokeswoman for Toys ‘R’ Us, says that the chain plans to include an expanded assortment of American-made toys in its inventory for the coming months. “And that will be a larger proportion than last holiday season,” she says.

CNN Money