The closely watched PMI from the Institute for Supply Management registered 49.0 for June, a slight improvement over last month, but still in contraction territory for the 30th time in the last 34 months. “In June, U.S. manufacturing activity slowed its rate of contraction, with improvements in inventories and production,” according to ISM, while “demand indicators remain mixed, with the New Orders and Backlog of Orders indexes contracting at faster rates, while the Customers’ Inventories and New Export Orders indexes contracted at slower rates.” Numerous survey respondents cited tariff uncertainty as a key factor:
- “Business has notably slowed in last four to six weeks. Customers do not want to make commitments in the wake of massive tariff uncertainty.” [Fabricated Metal Products]
- “The tariff mess has utterly stopped sales globally and domestically. Everyone is on pause. Orders have collapsed.” [Machinery]
- “Tariff volatility has impacted machinery, steel and specialized components. Also, potential shortages of skilled labor for construction, maintenance and installation.” [Food, Beverage & Tobacco Products]
- “Tariffs continue to cause confusion and uncertainty for long-term procurement decisions. The situation remains too volatile to firmly put such plans into place.” [Computer & Electronic Products]
- “Tariffs, chaos, sluggish economy, rising prices, Ukraine, Iran, geopolitical unrest around the world — all make for a landscape that is hellacious, and fatigue is setting in” [Primary Metals]
- “The word that best describes the current market outlook is ‘uncertainty.’ The erratic trade policy with on-again/off-again tariffs has led to price uncertainty for customers, who appear to be prepared to hold off large capital purchases until stability returns.” [Transportation Equipment]
See the full report here.
