Manufacturing expansions reflected in record Milwaukee Purchasing Managers Index

Manufacturers in southeastern Wisconsin are experiencing record growth, according to the latest Institute for Supply Management-Milwaukee Purchasing Managers Index.

In fact, the PMI for November was 70.25, the highest reading in the index’s 16-year history, according to Michael Antonelli, equity sales trader at Milwaukee-based Robert W. Baird & Co. Inc. The previous high was 70.00 in September 2007.

Any number above 50 is an indicator of increased monthly production among manufacturers in southeastern Wisconsin, and the Milwaukee index has been above 50 for 13 of the past 15 months.

These high readings may be reflected in the area’s many expansions and additions at such manufacturers as Burlington-based Lavelle Industries Inc. and Milwaukee-based Pflow Industries Inc.

“I think confidence in the industry is up overall,” said Tom Sowinski, vice president of operations at Pflow, which makes vertical lifting equipment. “I know the clientele we work with are looking at growth for the future and are optimistic, so that’s a real positive sign for us. We’ve had banner year after banner year, and next year looks like it will be another strong year.”

To make room for that growth, Pflow announced earlier this month that it purchased a 26,000-square-foot building across the street from its 140,000-square-foot plant. The company bought the property at 6667 N. Teutonia Ave. for about $500,000 from Grafton-based Atlas Iron & Wire Works Inc., which previously occupied the building.

The building, which will house some of Pflow’s manufacturing overflow, inventory and research and development, is expected to be operational by the end of the first quarter of 2015.

While Sowinski believes the growth his company and other manufacturers are experiencing is due to pent-up demand following the recession, Lavelle chief financial officer Deborah Scheffler has another perspective.

“When I talk to colleagues at other manufacturing companies, most are experiencing healthy growth in business,” she said. “It depends on the industry—some are doing better than others—but overall, Wisconsin manufacturing companies’ commitment to being made in the U.S. and driving productivity improvements makes them more competitive. ”

As a result of the continuing growth in its Korky brand, Lavelle is currently undergoing an expansion at its Whitewater production facility to increase manufacturing and warehouse space.

The manufacturer of toilet repair products and custom molded rubber parts announced in September that it purchased 2.5 acres of adjacent land in order to build a 12,600-square-foot addition to its 25,000-square-foot existing facility at 1215 E. Universal Blvd.

The construction project, which follows a similarly-sized expansion less than two years ago, is expected to be completed by early summer 2015.

“Certainly, continually low interest rates make it more convenient to expand,” Scheffler said.  

She added that Lavelle plans to hire additional full-time employees and part-time University of Wisconsin-Whitewater students, although the number of hires will depend on sales and growth. Lavelle is presently experiencing growth from existing customers, new customers and additional products.

New orders, production and employment are areas in which Milwaukee-area manufacturers are growing, according to the November Marquette-ISM Report on Manufacturing, as are inventories, prices, backlog of orders, exports and imports.

Customers’ inventories were the only area found to be declining, and supplier deliveries were indicated as “slower.”
As for Pflow, Sowinski said the company is “up across the board.” In particular, it is seeing a steady backlog of quotes and high product demand.

Another addition is currently underway at InPro Corp., a Muskego-based manufacturer of door and wall protection, wall rails, washroom surrounds, internal signs and curtains for health care facilities, hotels, educational institutions and commercial spaces. The company also makes expansion joint systems for buildings.

InPro is constructing a 29,810-square-foot, two-story office building at the southeast corner of Janesville Road and Mercury Drive on the company’s corporate headquarters campus. The building will house the company’s finance and supply chain management departments, while its corporate headquarters will remain in the main office building on Apollo Drive.

The new building has a tentative move-in date of May, said vice president of supply chain management Mike Sekula.

Although its health care markets have remained fairly flat, Sekula said InPro has seen big growth in other markets. InPro anticipates eight percent growth companywide next year.

Additionally, Sekula said some of his suppliers are growing at 15 to 25 percent.

Like Sowinski, he believes manufacturing is thriving right now due to pent-up demand from the recession.

Other area manufacturers that are expanding include Milwaukee-based Charter Wire, Sussex-based Sharp Packaging Systems LLC and Sheboygan-based Rockline Industries.

Charter Wire, a division of Mequon-based Charter Manufacturing Co. Inc., is building a $20 million, 69,000-square-foot addition at its 160,000-square-foot plant in Milwaukee’s Menomonee Valley due to growth opportunities in the markets it serves.

The company plans to add 35 jobs as part of the expansion.

Sharp Packaging, a manufacturer of flexible packaging systems, is building a new 151,970-square-foot headquarters facility on a vacant 15-acre site in the Sussex Business Park.

The new facility will house both Sharp Packaging’s manufacturing and its corporate headquarters. Its existing headquarters is located at N62 W22632 Village Drive in Sussex.

The first phase of the project is expected to be completed by the end of 2015, and the company also has plans for a 39,000-square-foot future second phase addition.

Rockline Industries, one of the world’s largest private-label manufacturers of consumer wet wipes and coffee filters, announced last spring that it acquired a 240,000-square-foot facility on a 30-acre site in Russellville, Ark., to continue its expansion plans.

“People are seeing the upswing in the stock market, consumer confidence is back, and (the difficult years of 2008 and 2009) are behind us,” said Sowinski of why so many manufacturers are currently investing in hard assets. “The fundamentals are better, and people are seeing the demand.”