Data provide mixed message on manufacturing

Industry loses jobs as economic activity picks up


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

Two pieces of data released Friday – job figures and the March PMI – highlight the mixed picture the manufacturing industry is currently facing.

The job figures released by the Bureau of Labor Statistics show the manufacturing industry lost 29,000 jobs nationally in March, but the national Institute for Supply Management’s March PMI registered 51.8. A reading of more than 50 indicates increased economic activity in the sector.National-Jobs-040116-Athomas

The March reading was the first time the report topped 50 in six months. The ISM report found growth and improvement in new orders, production, prices, order backlogs and exports. The report’s employment index was down from February and came in at 48.1, indicating contraction.

“We have begun to see some signs of stabilization for demand and production in other manufacturing data – but that has not translated into jobs just yet,” Chad Moutray, National Association of Manufacturers chief economist, wrote in a blog post.

The drop in manufacturing jobs was led by the durable goods segment, with a decrease of 24,000 jobs. Machinery (down 6,500), transportation equipment (down 4,300) and fabricated metal products (down 4,200) were the biggest job losers within the segment. Computer and electronic products was also down 3,400 jobs, driven primarily by losses in semiconductors and electronic components.

The nondurable goods segment was off 5,000 jobs.

U.S. Labor Secretary Thomas Perez said that despite adding 215,000 jobs as a country, there are challenges that remain.

“Continued weakness in manufacturing, for example, is a reminder that we must keep working to restore balance to the economy, to ensure that the recovery benefits people in all communities, up and down the income spectrum,” Perez said.

Respondents to the ISM survey indicated things were moving in the right direction.National-PMI-040116-Athomas

“Unemployment rate is low in our county, making it hard to find workers. We are understaffed and running lots of overtime,” a respondent in plastics and rubber products said.

“Capital equipment sales are steady,” a fabricated metal products respondent said, while a machinery respondent said “requests for proposals for new equipment (are) very strong.”

The positive trend in the ISM report matches recent findings in the Milwaukee-area PMI, which has had three straight positive months after nine months in negative territory. Wisconsin has had an employment picture similar to that of the nation.

Doug Fisher, director of the Marquette University Center for Supply Chain Management , said many companies have been hesitant to expand employment too quickly after learning lessons from the Great Recession.

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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