Manufacturers picked up the pace in March

Manufacturing activity in southeastern Wisconsin and northern Illinois saw an uptick in growth in March, according to a new report.

The Marquette-ISM Report on Manufacturing showed the seasonally adjusted Purchasing Managers Index was at 53.25 in March, up from 50.32 in February.  

Any number more than 50 indicates growth, while less than 50 signals contraction. The PMI has measured more than 50 for 17 of the past 19 months.

In the March survey, respondents said:

  • The industry has been starting to experience an increase in sales.
  • New orders are now starting to come in. It will take several weeks before they hit production.
  • Companies are attempting to utilize a Kanban method in order to achieve Just In Time production.
  • Prices have increased for some products, but the majority has stayed relatively the same. The price increases have been a result of it being a new year. A key note is that U.S. scrap metal prices have been falling.

New orders, production, inventories, backlog of orders and imports grew in March. Employment, supplier deliveries, customers’ inventories, prices and exports all either declined or slowed their growth.

Regarding these indices, respondents said:

  • There have been late vendor shipments even with sufficient lead times. Along with that, there have been vendor part quality problems. This is a concern for the long term as companies are still trying to find good quality suppliers.
  • The biggest issue being faced is a lack of quality service vendors. The problems with vendors tends to be either they do not have enough personnel or have the wrong personnel in place. This causes orders to be lost or delayed, billing to be incorrect, and communication to be non-existent.
  • The rise and fall of natural gas and oil prices has not significantly impacted products that use them as cost drivers (i.e. transportation and airline prices are not going down in spite of slumping oil prices).
  • The West Coast ports have opened.

Seasonally adjusted blue collar employment increased from 46.5 in February to 51.9 in March, while seasonally adjusted white collar employment declined from 58.1 in February to 46.1 in March.

In the six-month outlook on business conditions, respondents indicated an upward shift in positive expectations compared with February. About 53.3 percent of respondents expect positive conditions over the next six months, 40 percent expect conditions to remain the same and 6.7 percent expect conditions to worsen within the next six months.

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