By Denny Gulino
WASHINGTON (MaceNews) – The Iran War and tariffs keep U.S. manufacturers and their customers worried about the future even as the industrial expansion continues, helped by those low-cost supplier countries instead of reshoring, the coordinator of October’s ISM purchasing managers survey said Monday.
The October survey itself came in close to expectations, a reading of 55.5, a little ahead of September’s 54.5. But there were a lot of negative comments from respondents who cited Iran and tariffs and even positive comments had negative aspects, Susan Spence told a conference call with reporters.
The inflation reading softened a bit, posting a 75.2 versus September’s 77.9, but Spence, who assembles the survey report and analyzes the results, mostly dismissed the improvement and said she expects little if any further softening until Iran is in the rear-view mirror. Overall prices have been increasing since long before the Iran War, accelerating for 25 months.
Despite the progress reports from the White House there is no significant reshoring reflected in this year’s surveys, she said, as manufacturers depend on their foreign suppliers. Customer inventories didn’t move as current high prices dampened buying.
Nevertheless, production, at 59.0 vs. September’s 56.7, remained above the 50 breakeven point in expansion for the 12th month in a row. New orders improved a bit, to 55.5 vs. 55.3. Backlogs sagged to 54.6 vs. 56.4.
“This month, 66% of our panelists have negative comments,” Spence said, “worse than last month.” On the slight improvement in prices, “I’m not really relieved.” Until some resolution of Iran, “It’s really not going to go a whole lot lower.”
New orders, while up a tiny amount, are “maybe just being held to the minimum.” They “order when they have to,” she said.
It’s evident purchasing managers are wondering, “What’s the next economic policy shoe to drop?” she said,
“We’re in expansion,” she went on, “so I can only wonder if we had the war over or resolved or super close to resolution, then I feel the floodgates would open.”
“I wouldn’t call it stagnant but I would say it’s being held back,” she said. Among the “hundreds and hundreds of comments, “I don’t see any comment saying, you know, we’re building a new footprint or we’re expanding here in the U.S.”
Three of the 12 manufacturing industries reported contraction, printing, paper and nonmetallic mineral products.