Area manufacturing activity jumps in January

Highest level since November 2014

manufacturing activity

Last updated on July 2nd, 2019 at 09:11 am

Manufacturing activity in southeastern Wisconsin reached its highest level in more than two years in January with the Milwaukee-area PMI nearly reaching 60.

manufacturing activity

The Marquette-ISM Report on Manufacturing put the index at 59.81, the highest level since November of 2014, although the report was not produced for five months in 2016. Any reading above 50 indicates growth in the region’s manufacturing sector.

The improvement was across the board as nearly every component of the report moved in a positive direction. New orders, production, backlog, prices and exports  were all up. Employment, up from 43.45 to 58.6, inventories, up from 36.84 to 50 and imports, up from 46.15 to 62.50, were among the biggest movers. Supplier deliveries were slowing and customer inventories were declining.

Respondents were generally optimistic about the industry, with several noting the positive sentiment had increased in recent months on hopes for decreased regulation, lower corporate taxes and increased infrastructure spending.

One respondent noted the business was extremely busy and it would be difficult to keep up with demand.

There were some signs of caution through as respondents noted increases in prices, particularly for corrugated products from China and suppliers extending lead times in general because of material shortages.

A number of respondents also pointed to labor availability as the greatest supply chain issue, particularly in professional and technical positions. The report’s employment index for blue collar work increased from 51.6 to 55.4 and the white collar index went from 46.2 to 55.4.

Lead times increased across the board with the average commitment lead time going from 37 days to 77 days for capital expenditures, increasing from 16 to 33 days for production materials and jumping from 7 to 20 days for maintenance, repair and operating supplies.

The six-month business outlook also improved with the diffusion index moving from 71.1 percent to 74.19 percent, including 58.07 percent who expect positive conditions.updated chart for milw ism

 

The Marquette-ISM Report on Manufacturing was suspended from May through September due to a lack of participation.

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Arthur Thomas
Arthur covers manufacturing for BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.