Area manufacturing improves in July, but tariff concerns remain

Milwaukee-area PMI above 60 for 9 of 12 months

manufacturing activity

Last updated on July 2nd, 2019 at 09:10 am

The region’s manufacturing sector remained strong in July, but respondents in the Marquette-ISM Report on Manufacturing continued to express concerns about the impact of tariffs and a potential trade war.

The Milwaukee-area PMI increased slightly to 61.66, up from 60.18 in June. Any reading above 50 indicates growth in the manufacturing sector. The index has been above 60 for nine of the last 12 months.

Despite the strong performance, the business outlook for the next six months declined slightly. The outlook’s diffusion index, which attempts to mitigate positive and negative bias, decreased from 55.88 to 52.78 percent.

The percentage of respondents expecting improved conditions over the next six months dropped from 41.18 percent to 33.33 percent. The percentage expecting things to get worse decreased slightly as well, but the number expecting things to remain the same increased from 29.41 percent to 38.89 percent.

Respondent comments pointed to tariffs and increasing prices as an area of concern. One respondent said suppliers were taking advantage of tariffs to increase prices and it has been difficult to recover the costs from customers.

Others said the tariffs are creating uncertainty for businesses.

Some respondents said business is good but capacity constraints along with parts, freight and labor shortages are causing problems.

Read more economic data reports at the BizTracker page.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at 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.

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