Southeastern Wisconsin’s manufacturing sector showed signs of growth for the first time in several months in January, but pessimism remains about the outlook for business conditions, according to the latest Marquette-ISM Report on Manufacturing.
The report’s Milwaukee-area PMI came in at 50.24 in January. A reading above 50 suggests the region’s manufacturing sector is expanding. The positive reading was the first since September and just the second in the past seven months.
The index had averaged just over 45 from October to December. The January reading pulled the three-month average up to 46.8.
January benefited from a sharp increase in new orders, order backlogs and exports. There was also improvement in production and supplier deliveries.
Still, respondents to the survey behind the report were generally pessimistic in their comments. They highlighted an unpredictable economic environment, challenges with both increasing interest rates and inflation and demand decreases.
The employment indexes in the report were both in negative territory, although blue collar employment was seen as stronger than white collar. Respondents noted some companies are seeking to decrease costs by shrinking their labor force while also noting employees are changing jobs frequently for better options and wages are increasing for both blue and white collar jobs.
The outlook for business conditions over the next six months remained pessimistic with a plurality, 46.2%, expecting conditions to worsen, up from 45.5% in December.
At the same time, there was an increase, from 18.2% to 23.1%, in respondents expecting an improvement in conditions.