U.S. motorhome maker Winnebago Industries Inc said its quarterly loss narrowed as demand for its biggest and most profitable vehicles showed signs of life, sending Winnebago shares up as much as 15 percent.

Winnebago, which has slashed half its workforce over the past few years as it grappled with the worst downturn in the RV industry's history, said it was hiring workers back, ramping up production and canceling the traditional holiday shutdown in order to keep up with rebounding demand.

The worst may be over, it said in a statement.

The encouraging announcements from a company that has been hammered by the downturn came as Winnebago reported a quarterly loss of $1.3 million, or 5 cents per share, down from a loss of $9.6 million, or 33 cents per share, a year earlier.

Analysts on average had expected the Forest City, Iowa-based company to report a loss of 7 cents per share, according to Thomson Reuters I/B/E/S.

Revenue for the fiscal first quarter rose 16.7 percent to $81 million.

Bob Olson, Winnebago's chairman, chief executive and president, hailed the revenue rise and a 350 percent increase in the order backlog as encouraging signs of a turning point.

The backlog was 1,521 vehicles as of November 28.

While the winter months may be challenging, I believe we can now look for growth, Olson said during a call with analysts to discuss the results.

The general economy is looking healthier, with slightly improved consumer confidence, stable fuel prices, low interest rates and an improved equity market.

He said the credit market was still difficult but improving.

Winnebago said it had increased its workforce by 350 during the quarter. The current headcount at the company, including the additional workers, is about 2,000. That is down from a peak of 4,220 in 2004.

U.S. motorhome manufacturers have watched sales drop for five years in a row as rising gasoline prices and then the worldwide economic downturn killed demand for its products, which in the case of Winnebago range in price from $65,000 to $317,000.

RV manufacturers expect to ship just 14,100 motorhomes in 2009, the industry's worst showing in the 38 years data has been collected. That is down 50 percent from the 28,300 shipped in 2008 and down 80 percent from 71,800 in 2004.

Winnebago shares were up $1.40 or 12.8 percent at $12.30 on the New York Stock Exchange at midmorning on Thursday, off an earlier high at $12.58.

(Reporting by James B. Kelleher; editing by John Wallace, Ted Kerr and Matthew Lewis)