Manufacturers continue to grow, but are less positive about future

Manufacturing activity in southeastern Wisconsin and northern Illinois continued to accelerate in October, according to a new report.

The Marquette-ISM Report on Manufacturing showed the seasonally adjusted Purchasing Managers Index was at 65.6 in October, up from 63.2 in September.

Any number above 50 indicates growth, while below 50 signals contraction. The PMI has measured above 50 for 12 of the past 14 months.

In the October survey, respondents said:

  • “We are not having any major issues at this time.”
  • “Motor pricing is up 2 percent.”
  • “Stainless nickel surcharges are rising.”

New orders, production, inventories, prices, backlog of orders and exports were all growing in October. Employment, supplier deliveries and customers’ inventories were slowing or declining.

Regarding these indices, respondents said:

  • “There are short-term issues due to capacity constraints. Most suppliers are addressing issues with various process improvements and lean activities instead of investing in new equipment yet.”
  • “Long-term issues—poor customer service, lack of stocking inventory at suppliers (distributors).”
  • “There have been port issues.”
  • “West Coast port issues are adding one-plus weeks.”
  • “Export markets are weakening.”
  • “There has been late ordering strength.”

Seasonally adjusted blue collar employment was declining, from 56.2 in September to 48.8 in October. And seasonally adjusted white collar employment was also declining, from 54 in September to 48.8 in October.

In the six-month outlook on business conditions, respondents indicated a downward shift in positive expectations compared to September. About 43.8 percent of those surveyed expect positive conditions over the next six months, 50 percent expect conditions to remain the same and 6.3 percent expect conditions to worsen.

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