Region’s manufacturing sector has declined in 6 of last 7 months

National report also shows November decline for sector

manufacturing activity

Last updated on March 17th, 2020 at 01:34 pm

The headline number in the latest Marquette-ISM Report on Manufacturing is not good news for manufacturers in southeastern is Wisconsin.

The Milwaukee-area PMI came in at 42.12 in November, down slightly from October and the fifth straight month the index has been below 50. Any reading above 50 suggests the manufacturing sector is growing while readings below that threshold indicate the sector is contracting.

The Milwaukee-area manufacturing sector has declined in six of the last seven months.

ISM November 2019 graph

Only two indicators in the report moved in a positive direction during November. The six-month business outlook diffusion index, which balances positive and negative bias, improved from 44.4% to 50%. The percentage of respondents expecting improved conditions increased from 16.7% to 31.3%.

The pace of supplier deliveries also improved in the quarter.

Outside of those indicators, the report’s other components, including new orders, production, employment, order backlog, exports and imports, declined.

The white-collar employment index did improve slightly from October, but remained in negative territory. Blue-collar employment continued a sharp decline in recent months from 45.2 in September to 38.4 in October and now 29 in November.

Even with the declining outlook, respondents continued to comment on the diminishing labor pool and difficulty finding blue-collar employees.

Respondents also said their production levels are currently at the lowest levels of the year and they are forecasting customer inventories to decline in 2020.

Wisconsin and the Milwaukee area are not alone is seeing a decline in the manufacturing sector. The national ISM Report on Business found a PMI of 48.1 in November. The two reports use similar methodologies but are not directly comparable.

The national PMI has been below 50 for four straight months now.

“Global trade remains the most significant cross-industry issue,” said Timothy Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “Overall, sentiment this month is neutral regarding near-term growth.”

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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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