The southeastern Wisconsin manufacturing sector in October reached its highest level of growth since August 2018, according to the latest Marquette-ISM Report on Manufacturing.
The Milwaukee-area PMI reached a seasonally adjusted 59.42 in October, up from 54.49 in September. A reading above 50 indicates growth in the region’s manufacturing sector. In the last six months, the index has averaged 49.6 as October’s higher reading combined with a low of 35.73 in April dropping out of the average.
Despite the growth suggested the latest report, respondents still expressed concerns about the COVID-19 pandemic is shaping their business.
One respondent noted that virus issues were impacting company head count and productivity while another said employees were losing entire weeks after getting sick on Monday, tested for COVID-19 on Tuesday and not getting test results until Friday.
“Biggest issue is that the customers are in Europe and going through another 4-week shutdown,” a third respondent said.
Others said the supply chain continues to be hampered by the virus, lead times are difficult to anticipate and personal protective equipment is becoming more limited, harder to find and more expensive.
While the overall employment component of the index moved into growth territory at 50.41, there were some potentially troubling signs. The blue collar employment index improved from 53.7 to 54.1, but the white collar index dropped from 50.8 to 43.1.
“No stimulus package means we are starting to lay off white collar workers who were not previously affected,” one respondent said.
The overall business outlook in the report improved slightly from September to October with 50% of respondents now expecting conditions to improve in the next six months, up from 47.1% in September.
The outlook’s diffusion index, which attempts to eliminate positive and negative bias, improved from 64.7% to 67.9% as the percentage of respondents expecting things to get worse dropped slightly.
