Area manufacturing sector continued growth in July

Report suggests slight decline in pace of expansion

manufacturing activity

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

New orders, production and employment were all down and the pace of growth in the region’s manufacturing sector slowed in July, but the Marquette-ISM Milwaukee-area PMI remained in strong, positive territory.

The monthly index, part of the Marquette-ISM Report on Manufacturing registered 56.98 in July. The reading was a drop from 58.68 in June.

The July reading was the lowest so far this year, but any figure above 50 indicates growth in the sector. The index has been at elevated levels since the beginning of the year. Those levels have not been seen since late 2014 and early 2015.

Other economic data reports have backed up the Milwaukee-ISM findings. The manufacturing sector has been a strong contributor to Wisconsin’s top ranking on the Chicago Federal Reserve’s Midwest Economy Index throughout the first half of the year. The state also had the strongest GDP growth in the Midwest during the first quarter and both durable and nondurable goods manufacturing made a strong contribution.

Respondents hit on many of the same issues they have touched on in recent months. Prices have been increasing for raw materials. Demand has been strong but there has also been limited visibility and certainty beyond 90 days.

The employment outlook for both blue and white collar positions remained in positive territory with blue collar increasing from 59.1 in June to 61.6 in July. The white collar outlook was down slightly from 55.3 to 52.8.

manufacturing activity

Respondents said employees are working overtime and difficulty maintaining staffing levels is affecting the availability of raw materials.

The outlook for business conditions over the next six months diminished slightly as the report’s diffusion index, which attempts to account for bias towards positive or negative views, declined from 66.67 percent to 59.09 percent.

The shift was largely the result of an increase in respondents expecting the same conditions and a decrease among those expecting an improvement. The percentage expecting things to get worse did move slightly higher as well.

Read more economic data reports on 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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