The headline number in the latest Marquette-ISM Report on Manufacturing for July showed continued growth, but slowing to the lowest growth pace of the year.
The Milwaukee-area PMI for the report was 57.54, down from 62.62 in June. A reading above 50 indicates the manufacturing sector is growing.
The six-month business outlook diffusion index, which attempts to balance positive and negative bias, decreased from 69.23% in June to 65.63% in July. In this outlook, there is an upward shift in negative expectations compared with June and May in terms of market conditions, according to the report.
Approximately 50% of respondents expect positive conditions, 31% expect conditions to remain the same and 19% of the respondents expect conditions to worsen within the next six months.
The new orders index in the report for July decreased by 21.6 percentage points compared to June while the backlog of orders increased by 7.1 percentage points in July compared to June.
Some area manufacturers are reporting low order volumes, increasing delivery times while customers are shopping around for the shortest lead times.
“Shortages curtail production and sales causing customers to go elsewhere; mixed with labor shortages these issues are placing a hold on what would be growth,” one survey respondent said.
Another survey respondent noted that it is down 12 positions with no applicants.
“We could run more machines and produce more if we had the people and materials, both are short,” a third survey respondent said.