Southeastern Wisconsin’s manufacturing sector contracted for the first time in two years in July amid growing concerns of an economic slowdown.
The Marquette-ISM Report on Manufacturing’s Milwaukee-area PMI came in at 49.42 in July. A reading above 50 suggests the region’s manufacturing sector is growing while figures below 50 suggest it is shrinking.
The July reading is the first below 50 figure for the index since July 2020 when the region was still emerging from the initial lockdowns of the COVID-19 pandemic.
One respondent on the July survey said COVID remains a major issue while others pointed to the ongoing war in Ukraine, higher oil prices and material lead times as top challenges facing businesses.
The outlook for the next six months did not provide much hope for improvement with 43.8% of respondents expecting things to get worse, up from 38.5% in June. Another 37.5% expect conditions to remain the same and just 18.8% expect conditions to improve.
Still, there were some optimistic notes from respondents who noted improved international transportation and ocean shipments arriving faster. Blue collar employment also continued to grow.
The other indices in the report beyond PMI, however, did not paint a pretty picture. New orders were down 12.3 points to 40.1, crossing into negative territory. Production was down 4.7 points, inventories were down 17.9 points and order backlog was down 21.4 points.