Milwaukee manufacturing sector contracts

The Milwaukee-area manufacturing industry contracted in April, according to a monthly report from the Institute for Supply Management-Milwaukee.

The Marquette-ISM Report on Manufacturing showed the PMI, a measure of manufacturing growth, was at 48.43 in April, down from 50.98 in March.

A reading above 50 indicates growth, while below 50 indicates contraction. This is the first time the index has shown contraction since a five-month dip ending in November 2012.
The indices for new orders, production, employment, supplier deliveries, customers’ inventories, prices and backlog of orders were weaker or declining. Inventories, exports and imports were growing.

Blue collar employment was at 49.3 in April, down from 54.2 in March. White collar employment was at 49.3, down from 50.2 in March.

A participant comment about employment: “I am looking for good purchasing people. What does the balance of the industry see for talent shortages/surplus?”

Here are some responses to the April survey from area manufacturers:

    “The main problem we’re having is the weather; spring is late in most of the country and that affects our sales.”
    “Most commodity prices continue to move sideways, although there have been some announced increases (i.e. corrugated and natural gas) despite the lack of sound economic fundamentals to support them.”
    “Short term – China labor not returning after New Year; taking until June to rebound; short term burst of demand from China customers.”

The six-month outlook on business conditions showed a huge shift in manufacturer attitudes. About 25 percent of employers expect worse economic conditions in the next six months, up dramatically from 5 percent in March. And only 33 percent expect positive conditions for the next six months, down significantly from 52 percent in March.

Here are some responses about the six-month outlook from area manufacturers:

    “Expect continued slow economic growth through the remainder of the year with commodity prices relatively flat during the same time.”
    “No solid LT forecast seen.”
    “Based on implemented and expected defense budget cuts.”
    “The plastics market still seems soft. Customers still holding off on placing large orders as they may have in the past.”

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