After showing
signs of growth in September, the southeastern Wisconsin manufacturing sector returned to a downward trend in October as companies saw customers pull back on orders and payments, according to the latest Marquette-ISM Report on Manufacturing.
The report’s Milwaukee-area PMI came in at 45.24 for October. A reading above 50 suggests the region’s manufacturing sector is growing while numbers below the threshold indicate a shrinking sector.
In September, the index came in at 53.04, reversing the trend of two months below 50 in July and August. The index has generally been trending down throughout the year after peaking in February.
The October report marked a return to the downward trend and was the lowest reading since July 2020. Over the past three months the index has averaged 48.76, the first time the three-month average has dipped below 50 since August 2020.
Many manufacturers have already been dealing with supply chain challenges and difficulty finding labor. Respondent comments in October's survey highlighted those issues but also pointed to new emerging problems.
“Customers delay the payment for product,” one respondent said.
“New order decreases,” another said.
The comments point to demand challenges to go along with the supply issues many manufacturers have been facing. Other respondents did note difficulty with long lead times, shortages of electrical components and decreases in overall production.
The outlook for the next six months also worsened in the latest report, with 50% of respondents expecting things to get worse, up from 44% with that view in September. There were 25% of respondents who said they expect business conditions to improve in the next six months, down from 33%.
