Wednesday, October 3, 2018

American Industry In Good Shape; From The Horses' Mouths

September's results for the Institute for Supply Management's Manufacturing and Services Sector Surveys are out, and, clearly, american industry is presently in very good shape. 

A little less so for manufacturers (purple) vs the August survey, but very much more so for service providers (yellow) -- above 50 denotes net optimism (economy expanding):

1-yr graph.... click to enlarge

Take a look at the reports' featured respondents' feedback; you'll note that, as we've been expressing ad nauseam herein, while present conditions are very good, global trade concerns make for a fuzzy outlook:


“The market is in a state of chaos with the latest round of tariffs. As an electronics original equipment manufacturer, our component prices have been impacted almost across the board. The tariffs have caused a mass rush to buy up inventories of affected products in order to minimize the long-term financial impact. This, in turn, is causing market constraints, which further drive up the cost and increase lead times.” (Computer & Electronic Products)

Tariffs starting to take a bite out of profitability.” (Chemical Products)

“Business is strong and relatively stable. Tariffs are putting pressure on Chinese imports. Labor rates are increasing as it is very difficult to find help.” (Furniture & Related Products)

“The economy's strength is holding [and] outlook for the industry is positive, although continuing margin compression in consumer packaged goods is restricting general growth momentum from the greater economy.” (Food, Beverage & Tobacco Products)

“Still extremely strong through November; starting to see a decline for steel prices for December.” (Fabricated Metal Products)

“General available capacity at suppliers continues to decrease, creating supply issues.” (Machinery)

Tariffs are creating a drag on some of our export opportunities.” (Plastics & Rubber Products)

“Sourcing hourly workers for remote locations continues to be a challenge for both full-time and part-time opportunities. Have implemented a wide variety of recruiting techniques and suppliers to aid us in sourcing this hard-to-find talent.” (Paper Products)

"Orders are coming in, but from a limited number of customers. The future looks very promising.” (Primary Metals)

“Suppliers are impacted by China tariffs, [which is] delaying or cancelling manufacturing transfer projects.” (Miscellaneous Manufacturing)


“[Additional] logistics costs, both inbound and distribution, caused by increased governmental regulation, and a shortage of class-A drivers is leading to a significant increase in [the] cost of goods [sold].” (Accommodation & Food Services)

“New residential construction market is still strong, with a good backlog of orders. Labor shortages and tariffs on materials continue to negatively weigh on earnings.” (Construction)

“Economy continues to exhibit strength. New construction, both residential and commercial, abounds. Harvest [is] about over. Overall, results appear promising. Every day is a bit better than the last.” (Finance & Insurance)

“Business activity has been slightly higher than normal, though pharmaceutical costs continue to put pressure on profitability.” (Health Care & Social Assistance)

“Starting peak holiday season ramp-up, [with] heavy importing. Building inventories of finished goods, replacement parts and supplies. Outlook very positive for [the] holidays and 2019.” (Information)

“Business generally remains strong, with new services being implemented.” (Management of Companies & Support Services)

“Prices and supply have flattened, and tariff concerns have subsided for our business [at least for the duration of 2018]. Things seems to be stabilizing.” (Mining)

“Overall positive outlook in the economy continues, but we are cautious due to limitations in available manpower.” (Professional, Scientific & Technical Services)

“Business activity is up sharply due to the rush of purchase requests received prior to fiscal year 2018 funds expiring on September 30.” (Public Administration)

“Our general state of business is strong, but there is a lot of uncertainty [about] the pending tariffs. This may cause a shift [in] production sites.” (Retail Trade)

“Import tariffs on steel, plywood, and [other] lumber are inflating prices, which are difficult to pass along to the end user due to competitive pressures. Labor and trucking shortages are affecting the industry. Low finished goods inventory is inflating home prices and causing buyers to delay purchases.” (Wholesale Trade)


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