Area’s manufacturing sector improved in December but remained in negative territory

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A year ago, the latest Marquette-ISM reading of 45.1 would have been cause for concern, but after three straight months of decline, December’s report is perhaps a small bright spot for a manufacturing sector that hasn’t had many this year.

The monthly Milwaukee-area PMI has been generally trending down since reaching a peak of 75.24 in February 2018. Any reading above 50 suggests the southeastern Wisconsin and northern Illinois manufacturing sector is growing.

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The reading has now been below 50 for six months in a row and seven of the last eight.

But the December report did contain some good news. The six-month outlook on business conditions came in at 61.76%, up from 50% in November and the highest reading in the last six months. Around 35% of survey respondents expect things to improve in the near future and just 12% expect conditions to get worse.

The other components of the report also generally showed gains across the board. New orders, production, prices, backlog and imports all improved but remained in negative territory.

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One survey respondent commented that tariffs on goods from China and uncertainty on international trade remained the biggest concern while another said reduced order volume and continued demand volatility are expected to continue into 2020.

The white- and blue-collar hiring indices both showed improvement from November but remained in negative territory.

One respondent noted that some companies are choosing to not replace voluntary departures from their blue-collar workforce while another said suppliers are increasing prices because they’ve had to outsource labor.

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