The pace of growth in southeastern Wisconsin’s manufacturing sector slowed in January as businesses continued to deal with supply chain issues, inflation and COVID-19 variants, according to the latest Marquette-ISM Report on Manufacturing released earlier this week.
The report’s Milwaukee-area PMI for January was 52.86, down from 58.28 in December. A reading above 50 suggests the region’s manufacturing sector is growing.
While continuing to grow, the index has generally trended down during the second half of 2021 and now 2022. In the past three months, the index has averaged 55.6, down from a peak of 64.9 in May.
Respondents to the survey behind the index pointed to many of the same issues manufacturers have faced in recent months. Lead times remain long and both exports and imports face problems.
“Little improvement in supply chain system so far, and it needs improvement,” one respondent noted.
Others pointed to the shortage of semiconductors, in particular, as an issue in the production of electronic goods.
Some also highlighted inflation and higher transportation costs affecting exports and imports.
Within the report, the indices measuring new orders, employment, supplier deliveries, inventories, customer inventories and prices were all down.
Production, order backlog, expects and imports were all up.
The outlook for the next six months did improve slightly. The report measures the outlook using a diffusion index that tries to balance positive and negative bias. In November and December, the outlook was at 44.12%. It improved to 46.67% in January.
The shift was driven by a decline 41.2% to 33.3% among those expecting things to get worse. The number of respondents expecting things to get better also dipped from 29.4% to 26.7% while the percentage expecting things to stay the same increased from 29.4% to 40%.
