Manufacturing activity continues to stall

The Milwaukee area manufacturing sector continued to languish this month, according to a report released today by the Institute for Supply Management-Milwaukee.

September’s seasonally adjusted Purchasing Managers’ Index (PMI), was 47.2, up from 42.9 in August. However, any number below 50 indicates a general decline.

The PMI has registered below 50 since July, when it dropped to 46.7, ending three consistent years of growth.

For 17 consecutive months in 2008 and 2009, the PMI was at 50 or below, according to ISM-Milwaukee.

Customers’ inventories, prices and exports are growing this month, while new orders, production, inventories, backlog of orders and imports are declining. Supplier deliveries, which grew at a significant rate in August, are slowing.

Employment was mixed this month. Blue collar employment was at 47.6, down from 51.5 in August. White collar employment was at 58.9, growing at a fast rate, up from 51.5 in August.

Buying policies changed as well, with average commitment lead time for capital expenditures down by 30 days, to 84 days.
Average lead time for production materials decreased by six days, to 41 days. Average lead time for maintenance, repair and operating supplies was down one day, to 20 days.

Manufacturers’ comments from the survey included:
“Domestic business remains a slow, steady challenge.”
“There’s been no significant announcements of cost increases. Most everything is status quo, at this point.”
“Blue collar employment: quality of applicants is poor.”
“Oil and gas industry new orders have fallen to a trickle…anyone with a large financial commitment will not commit until after the election.”

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