The Milwaukee area manufacturing industry started growing again in June, following two months of contraction, according to the latest report from the Institute for Supply Management-Milwaukee.
The Marquette-ISM Report on Manufacturing showed the PMI, a measure of manufacturing growth, was at 51.55 in June, up from 40.67 in May.
A reading above 50 indicates growth, while below 50 indicates contraction. In April, the index showed its first contraction since a five month dip ending in November 2012.
The indices for inventories, prices and imports were growing in June; But the indices for new orders, employment, supplier deliveries, customers’ inventories, backlog of orders and exports were all declining. Production was flat.
Both blue collar and white collar employment were declining in June. Comments about employment included: “attrition — ‘quits’ not replaced” and “headcount reductions due to global reorganization and pending sale of business unit.”
The average commitment lead time for capital expenditures was 80 days in June, up by 15 days. The average lead time for production materials was up 1 day, to 33 days. Average lead time for maintenance, repair and operating supplies was flat at 19 days.
A six-month outlook survey showed manufacturers have lowered their expectations for market conditions. Just 28 percent of respondents expect positive conditions in the next six months, down from 44 percent in May. And 60 percent expect the same conditions, up from 44 percent in May. About 12 percent expect worse conditions in the next six months, the same as in May.
Comments about the outlook included: “seasonal spike,” “sales growth continues to be stagnant,” “competitive pressures” and “we see little increase in business.”
Those surveyed also gave general comments about the month of June:
- “Seasonal business has finally started to come in but the normal standard product still lags.”
- “Overall economic conditions remain sluggish, which has negatively impacted our sales. Some commodities seeing upward cost push (i.e. corrugated) but no major supply chain issues related to supply or demand.”
- “Seeing increased orders.”
- “Shipping at higher rates.”
- “The acrylic and polycarbonate markets have been soft since early in the year. Suppliers are offering special prices on spot buys.”
- “Market has been soft; lower spot buys.”
- “Strategic planning for growth.”
- “Lack of confidence in orders more than eight weeks out.”
- “Inaccurate forecasts are influencing supplier deliveries.”