Southeastern Wisconsin’s manufacturing sector grew for the second straight month in September and had its best performance since June 2019, according to the latest Marquette-ISM Report on Manufacturing.
The Milwaukee-area PMI came in at 54.49 for September, up from 51.37 in August. Any reading above 50 suggests the manufacturing sector in the region is growing.
For the last six months, the index has averaged 45.6. It has been below 50 for six of nine months this year and 12 of the last 15 month overall as the manufacturing sector faced rising trade tensions and then the COVID-19 pandemic.
In the September report, survey respondents pointed to pent up demand in the mining and automotive sectors along with growth in the food industry. On the other hand, respondents reported a sluggish energy sector and a downward trend in steel production and demand.
The improvement in the September report came from improvement in new orders, a slight gain in production, increasing prices and growth in order backlogs.
Supplier deliveries, however, declined and several survey respondents noted they are having supply chain issues. One pointed to increasing transportation lead times and capacity issues for trucking from Chicago and Memphis.
Another said issues with overseas supplier relations is leading to an effort to source more supplies domestically.
Overall, the report’s business outlook for the next six months rebounded to 64.7% after dipping to 54.6% in September. The outlook uses a diffusion index that attempts to balance positive and negative bias.
The change from August to September was largely the result of more survey respondents expecting conditions to improve. In September, 47.1% of respondents said things would get better, up from 27.3% in August. The percentage expecting things to stay the same dropped from 54.6% to 35.3%.
