Growth in southeastern Wisconsin’s manufacturing industry reached its highest level since at least 2006 in February, according to the latest Marquette-ISM Report on Manufacturing.
The survey-based Milwaukee-area PMI for February was 75.24, an increase of nearly 12 points from January. Any reading for the index above 50 indicates growth in the region’s manufacturing sector.
Doug Fisher, Marquette Center for Supply Chain Management director, said the reading was the highest in his time with the survey, which dates back to 2006. The most recent high point was 70.3 in November 2014.
“It’s just an incredibly positive business environment we’re in,” Fisher said, noting the general strength of the economy, low interest rates, low unemployment, strong demand, a politically favorable environment for business and Foxconn moving into the region. “Just overall, speaking to the Milwaukee numbers, this is just a good place to be right now.”
The 11.8 point increase from January was the second largest one month jump in the PMI since the start of 2014. The index hasn’t dipped below 55 since the start of 2017 and has been trending up with the six-month average increasing every month since September.
Other components of the report showed improvement as well. Employment was up 15.7 points to 77.21, production was up 13.2 points to 82.10, order backlog was up 11.5 points to 61.54 and exports were up 11.7 points to 65.
The six-month outlook for business conditions also improved with a diffusion index – which seeks to eliminate positive and negative bias – increasing to 80 percent from 75 percent in January. The improvement was driven by an increase in those expecting improved conditions and declines in the percentage expecting things to stay the same or get worse.
Respondent comments, however, did point to some challenges for businesses, including workforce challenges in transportation and general labor, shortages of electrical components and potential for long-term increases in steel and aluminum depending on trade actions.
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