The production rate of Milwaukee-area manufacturers contracted for the second consecutive month in May, according to the latest report by the Institute for Supply Management-Milwaukee.
The Marquette-ISM Report on Manufacturing showed the Purchasing Managers Index (PMI), a measure of manufacturing growth, dipped to 40.67 in May, slipping from 48.43 in April. Any rate below 50 indicates a contraction in production.
The May index showed accelerated declines in new orders, production, employment and inventories.
Blue collar employment at local manufacturers fell to 46.2 in May, from 49.3 in April. White collar employment also fell to 46.2, down from 49.3.
Here are some of the responses to the May survey:
- “The overall business remains sluggish, but there are no major supply chain issues. There is upward cost pressure is some commodities, such as corrugated boxes and some plastics.”
- “The economy continues to be too fragile for any clear sign of growth. The biggest supply chain issues are raw material supply security and long lead-time.”
- “Customers delaying receipt.”
- “Global reorganization underway, in response to sluggish economy.”
- “Replacements for workers let go in previous months.”
- “Prefer not to have risk of inventory.”
- “Running leaner.”
By contrast, the Chicago PMI increased in May to 58.7, up from 49.0 in April, indicating a significant uptick in production.
“This is a pleasant surprise, especially in the light of the plunge in the Milwaukee PMI, which earlier today was reported to have dropped sharply,” said Ian Shepherdson of Pantheon Macroeconomics in a research note.