Milwaukee manufacturing growth bucks national, Midwestern trends

Milwaukee-area manufacturers reported continued strong growth during July, according to the latest report from the Institute for Supply Management-Milwaukee.

The seasonally adjusted purchasing managers’ index was 63.9 in July, up from 60.6 in June. Any number above 50 indicates growth, while below 50 signals contraction. The PMI has measured above 50 for nine of the past 11 months.

Milwaukee’s PMI has been far outperforming the national PMI since May. The national PMI was 57.1 in July, up from 55.3 in June. But it was starkly different from the Chicago PMI reading for July, which fell to 52.6 from 62.6 in June and was the worst for that market in more than a year.

Milwaukee survey respondents said in July:

  • “Greatest issues our supply chain is facing are lousy customer service and reduced inventories.”
  • “Aluminum mill is well behind.”

On a seasonally adjusted basis, new orders, production, employment and inventories were growing in July, while supplier deliveries slowed. On an non-seasonally adjusted basis, customers’ inventories were declining and prices, backlog of orders, exports and imports were all growing.

About these indices, respondents said:

  • “Reduced inventories are causing soaring lead times.”
  • “Keep 30-45 days’ inventory on most items.”
  • “Slight impact in strengthening Rupee.”

Blue collar employment was growing, at 56.7 on the diffusion index. White collar employment was also growing this month, at 53.9.

Regarding employment, responses included:

  • “Vendor personnel cutbacks have led to a reduction in the amount of customer service people, causing poor communication.”
  • “Some suppliers seeing constraints on filling direct labor openings—short term issue for the moment but indicator of risk if we see bigger recovery.”

In the six-month outlook on business conditions, there was an upward shift in positive expectations compared to June. About 37.5 percent of respondents expect positive conditions, 56.3 percent expect the same conditions and 6.3 percent expect worsening conditions over the remainder of the year.

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