Milwaukee ISM hits highest level in nearly three years

Increased activity presenting challenges for supply chain

manufacturing activity

Last updated on July 2nd, 2019 at 09:10 am

Milwaukee-area manufacturing activity reached its highest level in nearly three years, according to the Marquette-ISM Report on Manufacturing for October.

The report, produced by the Marquette University Center for Supply Chain Management, found a Milwaukee-area PMI of 63.61, up from 60.24 in September. Any reading above 50 indicates growth in the industry. October’s reading was the highest since November 2014.

October marked the second straight increase after the index declined over the summer. The average for the six months ending in October was the best since June.

Respondents indicated they are having some issues with suppliers. In some cases, the hurricanes that hit Florida and Texas are pushing prices up; in others, prices are just increasing and locking in at higher levels for next year. Some respondents said longer lead times and unexpected shortages are leading to production challenges.

The overall employment index in the report was down from 63.67 to 55.12, still in positive territory. The blue and white collar employment indices both dropped during the month. Blue collar was down from 61.2 to 57.3 and white collar went from 60.6 to 50.7.

Respondents said there are persistent challenges hiring blue collar workers and a tightening labor market is causing capacity issues in the supply chain. The availability of labor was described as the primary supplier constraint.

Despite some of the challenges, respondents were positive about business conditions moving forward. The outlook diffusion index, which attempts to eliminate positive and negative bias, was 65.22 for October, up from 58.82 in September. The increase was driven by an increase in the percentage of people expecting positive conditions.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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