(Bloomberg) -- Very concerning. Two products eliminated. Commodity prices rising. Business planning βis at a standstill.β
That's what a few American manufacturers said they're facing as the Trump administration weighs tariffs on imported metals and Chinese products, creating uncertainty for companies that by most other accounts are going gangbusters. The threats of a trade war are worsening the headaches for factories already struggling to find the workers, supplies and delivery trucks to keep up with robust demand, according to a report Tuesday by the Institute for Supply Management.
Overall, the ISM survey several showed the industry remains in a healthy, if constrained, expansion. βBusiness is off the charts,β according to a transportation equipment maker, while a producer in the computer and electronics sector said the βnew-order rate exceeds shipment rate.β
Still, the ISM's factory index slumped in April to a nine-month low, signaling a moderating though solid pace of expansion. A measure of order backlogs was the highest in almost 14 years, and delivery times lengthened to match the second-longest since 2010. The gauges for new orders and production weakened for a fourth straight month.
Tariff-related uncertainties may last another one or two months and will probably βwork itself out,β said Timothy Fiore, chairman of the factory survey for the Tempe, Arizona-based ISM. βOverall demand remains very strong,β and manufacturers are βhaving trouble catching up,β he said. The shortage of qualified labor is a long-term constraint, Fiore added.
--With assistance from Katia Dmitrieva and Jeanna Smialek
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net.
To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Brendan Murray
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