The headline number in the latest Marquette-ISM Report on Manufacturing for December showed the manufacturing sector continuing to grow in southeastern Wisconsin, albeit at a slower pace than in November.
The Milwaukee-area PMI in the report was 55.54 for December, down from 61.96 in November. A reading above 50 indicates the manufacturing sector is growing. The index has now been above 50 for five straight months.
Survey respondents also expressed more confidence in business conditions going forward. The six-month business outlook diffusion index, which attempts to balance positive and negative bias, increased from 61.1% to 68.2%.
The shift was driven by an increase from 38.9% to 50% in the number of respondents expecting conditions to improve. The percentage expecting things to stay the same dropped from 44.4% to 36.4% and those expecting things to worsen dropped from 16.7% to 13.6%.
Despite the positive numbers, the report did find a slowing in the pace of growth for new orders and backlogs. Production and employment slipped into declining territory.
Respondents highlighted two areas where they are experiencing challenges.
Some noted they are having issues getting materials because of supply chain challenges.
“One supplier had a boat in queue for 20 day(s) to get unloaded – delaying parts arrival,” one respondent said. “Suppliers are seeing lead times extending at year end.”
“The shortage of containers from Asia is having a big impact on us getting material from offshore suppliers,” another respondent said.
Others said shipping dock delays are a result of both container and manpower shortages.
The other challenges cited by respondents are labor-related.
“COVID continues to be a challenge, especially surrounding the holidays with individuals being sick – causing delays and labor issues,” one respondent said.
Another respondent indicated labor issues would “get a little worse … as we round out the holidays.”
A third respondent said personal protective equipment, specifically gloves, are in tight supply and prices have almost doubled since the start of the pandemic.
