Growth in southeastern Wisconsin’s manufacturing sector continued to slow in May as companies continued to deal with a number of supply challenges and the pace of new orders dropped, according to the latest Marquette-ISM Report on Manufacturing.
The report’s Milwaukee-area PMI dropped from 52.86 in April to 51.96 in May. Any reading above 50 indicates the sector is growing.
May’s reading marks the third straight month of declines for the index, which has been down eight of the past 12 months. The rolling six-month average of the index has been down 10 of the past 12 months, with the only improvements coming in June 2021 and February 2022.
In the latest report, survey respondents pointed to a number of issues hampering the manufacturing sector, including the war in Ukraine, supply chain issues from the latest rise in COVID cases and lockdowns in China, raw material shortages, and inconsistent market behavior.
New orders are also declining with the report’s new orders index dropping 7.7 points to 38.35, order backlogs dropped 5.7 points to 55 and inventories climbed 12.4 point to 58.19.
The outlook for the next six months did improve from April when the report’s diffusion index, which attempts to balance positive and negative bias, was at 35.71%. That index climbed to 50% in May. The shift in sentiment came from across the board but was led by a drop in respondents expecting things to get worse from 50% to 30%. Forty percent of respondents expect things to stay the same, up from 28.57% in April, and 30% expect improving conditions, up from 21.43%.
