Region’s manufacturing sector returns to growth for first time since January

Last updated on September 1st, 2020 at 12:01 pm

Southeastern Wisconsin’s manufacturing sector grew for the first time since January, according to the August Marquette-ISM Report on Manufacturing.

The report’s Milwaukee-area PMI came in at 51.37 for August. A reading above 50 suggests the region’s manufacturing sector is growing. The index dipped below 50 in February and plummeted toa low of 35.7 in April. It was 44.9 in July.

Growth in new orders, production, employment and order backlogs helped fuel the improvement, as did increases in imports and exports.

Supplier deliveries did decline somewhat and comments from survey respondents indicated companies are still facing supply chain issue brought on by the COVID-19 pandemic.

“Backorders pile up as supplier(s) are having hard times meeting fulfillment schedules,” one respondent said.

Others noted issues with a decrease in airfreight capacities, generally slow deliveries and problems with international suppliers.

“Due to issues with overseas supplier relations, trying to source more supplies domestically,” a respondent said.

The report’s outlook for the next six months declined from July as fewer respondents expect business conditions to improve. In July, 45.5% of respondents expected conditions to get better compared to just 27.3% in August.

The percentage expecting things to stay the same jumped from 36.4% to 54.6%. As a result, the report’s diffusion index, which seeks to balance positive and negative bias, dropped from 63.6%A to 54.6%.

Separate data released Monday by the Chicago Federal Reserve showed Wisconsin’s manufacturing sector lagging behind the rest of the country in July after trending better than the nation from March to June.

The Chicago Fed’s Midwest Economy Index uses a relative measure to track how major sectors in its five-state region are performing given the broader macro conditions in the U.S. since the national economy often dictates the direction of the state.

In July, Wisconsin’s manufacturing sector lagged by 0.16 standard deviations after being ahead 0.86 and 0.34 in May and June respectively.

Overall, Wisconsin’s economy was behind 0.95 in July given national conditions and 1.39 standard deviations behind in June.


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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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