Khaberni - In an industry floundering under the weight of tariffs and regulatory uncertainty, manufacturing activity in the United States recorded a new contraction during November, marking 9 consecutive months of decline, according to the Wall Street Journal.
The Institute for Supply Management index came in at 48.2 points, down from 48.7 in October, forming a level below the 50-point barrier that separates expansion from contraction.
Susan Spence, the head of the index committee, clearly summarized the situation stating, "It really is about the tariffs, we do not see anything on the horizon that might change this course."
Higher Costs and Hiring Freeze
The newspaper confirms that American companies now face higher costs for imported materials following a wave of tariffs imposed by the Trump administration since July, while tariff levels have become an element of ongoing uncertainty due to their changes throughout the year.
The Wall Street Journal states that 67% of companies participating in the survey indicated that they are "managing employee numbers instead of expanding hiring" under the pressure of costs and weak demand.
Sectors such as textiles, apparel, paper, chemicals, and transport equipment are among the industries most in decline, and the report states that the transport sector in particular received a "strong blow", prompting some companies to choose moving production lines abroad instead of re-manufacturing within America.
A separate survey conducted by Standard & Poor's Global on manufacturing activity showed a reading at 52.2 points, down from 52.5 in October, but it still remains above the expansion level.
However, the report clarifies that the rise in production coincided with a "jump in unsold inventories", in addition to a clear slowdown in demand growth, particularly from export markets affected by tariffs and trade uncertainty.
Possible Slight Improvement but Slow
Economic expert Oliver Allen, from "Pantheon Macroeconomics", told the newspaper that a decline in uncertainty related to tariffs, along with lower interest rates and the presence of tax investment incentives, might slightly boost industrial production in the first half of the upcoming year.
But Allen quickly warned, saying, "We expect this recovery to be slow and modest."
The data compiled in the Wall Street Journal report agrees that tariffs, whether current or threatened with increase, have become a central factor in the decline of the American industry, and that companies face a bleak mix of cost pressure, weak demand, and legal uncertainty as they await a Supreme Court decision that could invalidate part of the imposed tariffs.
According to the newspaper's report, the ship is still tipping towards contraction.. and nothing on the horizon indicates an imminent change.
