Region’s manufacturing index dips but activity remains high

Last negative reading was October 2016

manufacturing activity

Last updated on July 2nd, 2019 at 09:10 am

The growth in southeastern Wisconsin manufacturing activity slowed in November but remained at elevated levels, according to the latest Marquette-ISM Report on Manufacturing.

The Milwaukee-area PMI for the month was 59.62, down from 63.61 in October. Any reading above 50 indicates growth in the manufacturing sector. The index has not dipped below 55 this year and has not shown a contraction since October 2016.

New orders and backlogs increased in November as did employment, but production was down and supplier deliveries slowed.

Respondents indicated their suppliers may be running into some issues as the increased level of activity has been sustained for nearly a year. Many local steel fabricators are running into capacity issues, making it harder to deliver on time, respondents said, while major manufacturers are extending their lead times and suppliers were increasing minimum buying requirements.

One respondent said customers are toning down expectations for 2018, but worried they may be under-planning. The business outlook for the next six months improved and no respondents said they expected worse conditions moving forward. The diffusion index – which seeks to balance positive and negative bias – increased to 73.33 percent. Nearly half of respondents, 46.67 percent, expect positive conditions.

As in previous reports, respondents pointed to challenges with labor availability. The white collar employment index increased from 50.7 to 58.3 and the blue collar measure was up from 57.3 to 58.3.

Read more economic data reports at the BizTracker page.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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