Manufacturing activity skyrockets

Milwaukee-area manufacturing activity increased significantly in May after faltering in April, according to a new report from the Institute for Supply Management-Milwaukee.

The Marquette-ISM Report on Manufacturing showed the seasonally adjusted Purchasing Managers Index was at 63.49 in May, up from 47.26 in April.

Any reading above 50 indicates growth, while below 50 suggests contraction. The Milwaukee PMI has been yo-yoing for several months, but has not reached this level for more than three years, when it was at 69 in April 2011.

Respondents in the May survey said:

  • “We are being impacted by a large increase in orders. The major issue for me at this time is production capacity to fill these orders. We do not have many supply chain issues at this time.”
  • “Quoting activity and dollar volume have increased in the past four weeks; sales rose but quoting was unexpectedly high.”
  • “NA sales orders ahead of plan”
  • “Business is already brisk”
  • “Strong automotive”
  • “Heavy RFQ activity”
  • “Only challenge is in freight movement – delayed rail movement; sea freight held up for bundling shipments
  • “Aluminum mill lead times extended”
  • “Inventory, customer service seriously bad right now”
  • “Anticipation orders covering port stoppage.”

New orders, production, employment, supplier deliveries and inventories are all growing, on a seasonally adjusted basis.

Blue collar employment is growing, up to 59.9 from 48.3 in April. White collar employment is also growing, up to 53 from 52.1 in April.

The six month outlook on business conditions is skewing positive, with a 67.5 percent diffusion index. About 45 percent expect positive conditions, another 45 percent expect the same conditions and 10 percent expect worse conditions in the next six months.

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