Manufacturers see growth yet again in March

Special to The Freeman

March 31, 2015

MILWAUKEE – The Marquette-ISM Report on Manufacturing showed the seasonally adjusted Purchasing Managers Index for March is 53.25, up from 50.32 in February.

This places the index above 50 for seventeen of the past nineteen months, which indicates growth.

Respondents in the March survey said:

•     The industry has been starting to experience an increase in sales.

•     New orders are now starting to come in. It will take several weeks before they hit production

•     Companies are attempting to utilize a Kanban method in order to achieve Just In Time production

•     Prices have increased for some products but the majority has stayed relatively the same. The price increases have been a result of it being a new year. A key note is that US scrap metal prices have been falling.

Other areas that showed growth include new orders, production, inventories, backlog of orders, and imports. Employment, supplier deliveries, customers’ inventories, prices, and exports all showed either slower or declining direction.

Respondents said this of the growths and declines:

•     There have been late vendor shipments even with sufficient lead times. Along with that there have been vendor part quality problems. This is a concern for the long term as companies are still trying to find good quality suppliers.

•     The biggest issue being faced is a lack of quality service vendors. The problems with vendors tends to be either they do not have enough personnel or have the wrong personnel in place. This causes orders to be lost of delayed, billing to be incorrect, and communication to be non-existent.

•     The rise and fall of natural has and oil pieces has not significantly impacted products that use them as cost drivers (i.e. transportation and airline prices are NOT going down in spite of slumping oil prices).

•     The West Coast ports have opened.

Blue Collar employment increased from 46.5 in February to 51.9 in March. White collar employment decreased from 58.1 in February to 46.1 in March.

The six-month outlook shows an upward shift in positive expectations compared with February in terms of market conditions.

Approximately 53.3 percent of respondents expect positive conditions, 40 percent expect conditions to remain the same and 6.7 percent expect conditions to worsen within the next six months.

www.marquette.edu/supplychain