Manufacturers picked up the pace in September

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

The Marquette-ISM Report on Manufacturing showed the seasonally adjusted Purchasing Managers Index was at 63.2 in September, up from 59.6 in August.

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

Respondents in the September survey said:

• “Demand for parts for class 8 trucks and RV remains very strong.”

• “Ag market seeing big drops.”

• “We are hearing from our reps that they are quoting a lot of projects.”

New orders, production, employment, inventories, prices, backlog of orders, exports and imports were all growing in September. Supplier deliveries were slowing, while customers’ inventories were declining.

Regarding these indices, respondents said:

•  “Capacity is tightening for many suppliers, who have reduced capacity during the recession and never added it back.”

• “Our backlog has been reduced due to lack of incoming orders. This is not typical of our industry at this time.”

• “We are hearing from our sales reps that there is a significant amount of order coming in very soon.”

•   “We are unsure as to why the orders have slowed up.”

•  “Some of our suppliers have been very busy so their lead times have increased.”

• “We just started marketing more export business.”

•   “We had a sales pick up.”

•  “Reluctance to build their own inventory will impact orders the next two to three quarters.”

Blue collar employment was growing at a slower rate in September, while white collar employment was growing at a slightly faster rate.

Regarding employment, respondents said:

• “Finding good employees remains a challenge.”

• “We will need to have some layoffs for a short time.”

• “Trying to hire welders and assemblers.”

•  “We’re short a few people.”

• “There is a shortage of welders.”

The six-month outlook shifted in a positive direction, with about 60 percent of those surveyed expecting positive conditions over the next six months, 40 percent expecting the same conditions and 0 percent expecting worse conditions.