Manufacturing picks up the pace

Milwaukee-area manufacturing growth picked up in December, according to a report today from the Institute for Supply Management-Milwaukee.

The Marquette-ISM Report on Manufacturing showed the Purchasing Managers Index, a measure of manufacturing growth, registered at 54.27 in December, up from 52.06 in November. The PMI was 57.10 in October.

Any reading above 50 indicates growth, while below 50 suggests contraction. December is the fourth month in a row with manufacturing growth.

Survey respondents reported in December:

  • “A short-term challenge is the holiday shut downs from suppliers. We typically have to forecast, which is difficult as a custom manufacturer with low volume and several SKUs.”
  • “Most commodities are readily available. We are seeing a slight uptick in pricing for paper-based items and natural gas.”

Employment was up 8.3 percent in December. The blue collar employment index for December was 53.7, up significantly from 47.7 in November. And the white collar employment index was at 56.3, up from 56.1 in November.

Respondents indicated the hiring is a result of back-filling attrition they are experiencing.

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

Comments from those surveyed included:

  • “Military business is down”
  • “Inventories down due to higher shipping volumes”
  • “Supplier deliveries are slower due to holiday shutdowns”

Prices were lower from India and higher from the European Union and China in December.

In the six-month outlook, 42.9 percent of respondents expected positive conditions going forward, 42.9 percent expected the same conditions and 14.3 percent expected worse conditions. It’s a more positive view than in November, when 21.1 percent were positive, 63.2 percent expected the same and 15.8 percent expected worse conditions.

Commercial construction growth alleviated some worries, but uncertainty regarding healthcare and economic conditions continued to be a concern.

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