Growth in the Milwaukee area’s manufacturing industry remained strong in March, despite a dip from a record high in February, according to the latest Marquette-ISM Report on Manufacturing.
The Milwaukee-area PMI registered a seasonally adjusted 67.8, down from 75.24 in February. Any reading above 50 indicates growth in the sector.
Despite the positive reading, survey respondents expressed concern about President Donald Trump’s recently announced tariffs on steel and aluminum.
One respondent said the tariffs “pose significant risk as we will be at a competitive disadvantage to our competition based in Europe. They import finished goods and will not have tariffs, we import specialized raw materials that is not produced in the U.S. so that we can manufacture finished goods in the U.S. This will hurt us because we manufacture in the U.S. and they don’t.”
Another respondent said the firm had already received notification of a 40 percent price increase on future orders from a steel plate supplier.
“Currency markets and government policies are creating uncertainty,” a third respondent said.
Beyond the headline number, the ISM report showed a decline in production and inventories and an increase in order backlogs. New orders were flat, supplier deliveries were down and employment increased slightly.
The report showed slight gains in both blue and white collar employment. Respondents continued to say the labor market is tight with many firms looking to hire and challenges in retaining production employees in particular.
The outlook for the next six months was down with the diffusion index – which tries to eliminate positive and negative bias – declining nearly 10 points from 80 percent to 70.59 percent.
The decrease was driven by a drop in those expecting improved conditions while more expect things to stay the same.
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