One month doesn’t make a trend, but for the first time since June, the Milwaukee-area PMI was in positive territory in January.
Part of the Marquette-ISM Report on Manufacturing, the PMI for January came in at 53.33. Any reading above 50 suggests growth in the region’s manufacturing sector.
The index has been generally trending down since early 2018 and was below 50 for six straight months to end 2019.
Respondents for the report’s January survey noted that companies are beginning to source from countries other than China because of tariff uncertainty and described the outlook for the year as “cautiously optimistic.”
The report’s six-month business outlook was relatively unchanged with the diffusion index – which balances positive and negative bias – increased from 61.8% to 62.5%. Half of respondents expect conditions to remain the same while 37.5% expect things to improve.
Other indices in the report showed improvement, although many remained in negative territory. The biggest movers were production, up 12.5 to 57.8, and supplier deliveries, up 15.4 to 62.3. Employment increased 8.5 to 46.3 and prices increased 6.6 to 62.5.
Exports, down 1.7 to 33.3, and inventories, down 2.9 to 50, were the only two categories to show declines.
Other respondent comments were mixed. One noted a company was reorganizing production to accommodate a surge of backlog orders while another was dealing with increased inventories from fourth quarter order cancellations.
Respondents noted increased prices over the same time last year and longer lead times, but others said they planned more aggressive pricing to increase sales.
On the employment front, both white- and blue-collar measures were just below growth at 49.4. Respondents noted continued difficulty finding employee replacements and filling open roles, but did say there are seeing an increase in the number of job interviews.