Manufacturing growth slows in December
Despite headwinds, expert sees positive outlook for 2015

By Arthur Thomas - Freeman Staff

Dec. 28, 2014

MILWAUKEE — A report measuring manufacturing activity in the Milwaukee area showed a drop from November to December, but the measure remained in positive territory and the researcher behind it feels things are still looking good moving into the new year.

“We certainly have some headwinds — politics in Washington, interest rate concerns, Eastern civilization versus Western, and port congestion on the West Coast, to name just a few. But there is nothing new to any of these, and ‘commerce’ seems to find a way of getting done,” said Marquette University Center for Supply Chain Management Director Doug Fisher.

The Marquette ISM Report on Manufacturing Milwaukee- area PMI fell to 57.61 in December, down from the 68.93 measured in November, according to data released Friday. A reading above 50 indicates growth or expansion. The index has been above 50 for 14 of the past 16 months.

Despite a drop in the monthly report, Fisher emphasized that one data point does not make a trend. He said in his experience December tends to be a slower month with the holidays, plus much of the production and transportation takes place between September and November. Given those factors, Fisher said the December reading was “OK.”

“It seems to be supported by the underlying elements, as well as the stock market,” he said.

Those elements included growth — although at a slower pace than in November — in new orders, production, employment, inventories, customer inventories, exports and imports.

The outlook moving forward also remained positive, although there was a slight decrease in expectations. In November, 47.1 percent of respondents expected more positive conditions in the next six months. That number fell to 38.5 percent in December. The number expecting conditions to stay the same increased in December, from 41.2 percent to 52.8 percent.

A good sign for the area’s economy was that just 7.7 percent expected worse conditions in the next six months, down from 11.8 percent in November.

“If both elements were below 50, my antenna would be alerted to conditions in January. But, similar to Wall Street’s behavior in December, it may be that we see some adjustments, but that the underlying fundamentals remain acceptable to positive business conditions in early 2015,” Fisher said.

The report also found growing employment in both blue and white collar areas, although, like other measures, it was slower than in November.