Local manufacturing activity in negative territory for sixth straight month

A key measure of Milwaukee-area manufacturing indicated further contraction in September. The seasonally adjusted Purchasing Managers Index was below 50 for the sixth consecutive month, according to the Marquette-ISM Report on Manufacturing.

manufacturing
A key measure of Milwaukee-area manufacturing indicated further contraction in September.

The PMI was at 39.44 in September, down from 47.67 in August. Any number more than 50 indicates growth, while less than 50 signals contraction. The PMI has been below 50 for eight of the past 25 months.

In the September survey, respondents said:
• No major issues are of concern at this time.
• Many suppliers are rationalizing product offering, which forces customers to use valuable resources to requalify alternate materials instead of focusing resources on growing the businesses.
• There has been slowing demand from customers as the end of fiscal year is approaching.
• There are still plans to institute Kanban systems.

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Customers’ inventories and imports grew in September, while new orders, production, employment, supplier deliveries, inventories, prices, backlog of orders, exports and imports declined or slowed.

Seasonally adjusted blue collar employment declined from 54.3 in August to 45.1 in September, and seasonally adjusted white collar employment grew from 50.7 in August to 58.0 in September.

In the six-month outlook on business conditions, there was no change in positive expectations compared with August in terms of market conditions. Approximately 38.5 percent of respondents expect positive conditions over the next six months, 38.5 percent expect conditions to remain the same and 23.1 percent of respondents expect conditions to worsen within the next six months.

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