MNI INTERVIEW: US Factories Suffer Until Trade Fog Lifts- ISM
U.S. manufacturing is giving signs it will keep contracting and the longer trade uncertainty remains the greater the risk businesses start losing foreign orders, Institute for Supply Management manufacturing chair Susan Spence told MNI.
"Would really love to have a bright spot here but I'm just not seeing it until there's some certainty," she. "They want this tariff issue to be settled, and now we've got a [government] shutdown on top of it, which I think could affect some industries more than others."
Manufacturing is mired by low customer orders and higher input costs. The ISM manufacturing index increased 0.4pt to 49.1 in September, roughly in line with expectations, but the sector contracted for the seventh consecutive month in September.
New orders fell 2.5pt to 48.9, production increased 3.2pt to 51.0, and employment increased 1.5pt to 45.3. The new export orders component declined 4.6pt to 43.0, while the imports index declined by 1.3pt to 44.7. The prices paid measure declined 1.8pt to 61.9.
PYTHON EATING A RAT
"The production number is up. It is in expansion, but I don't think it's going to hold," Spence said. "There's nothing that shows me that there are more things knocking at the door."
The ISM chair suggested August's new orders jump was a blip, and demand will remain in contraction in coming months. "I've used a really bad analogy of a Python eating a rat. It's starting and it's flowing through, but there's no more rats."
