US manufacturing stuck in doldrums

PMI slips to 48.2 from 48.7 in October

- LUCIA MUTIKANI

A worker welds a steel tube at Janus Motorcycles in Goshen, Indiana.

(NYT)

US manufacturing contracted for the ninth straight month in November, with factories facing slumping orders and higher prices for inputs as the drag from import tariffs persisted.

The Institute for Supply Management survey on Monday also showed some manufacturers in the transportation equipment industry linking layoffs to President Donald Trump's sweeping duties, saying they were “starting to institute more permanent changes due to the tariff environment.” They added “this includes reduction of staff, new guidance to shareholders and development of additional offshore manufacturing that would have otherwise been for US export.”

Trump in May imposed 25% tariffs on more than $460 billion worth of imports of vehicles and auto parts annually but has since struck deals to reduce those tariffs on some countries. The Republican president has issued some tariff relief since then on parts and engines. A new 25% duty on imported mediumand heavy-duty trucks and parts came into effect on Nov 1.

“The manufacturing sector continues to be weighed down by the unpredictable tariffs landscape,” said Stephen Stanley, chief US economist at Santander US Capital Markets.

The ISM said its manufacturing PMI dropped to 48.2 last month from 48.7 in October. A reading below 50 indicates contraction in manufacturing, which accounts for 10.1% of the economy.

With some manufacturers citing the recently ended US government shutdown, a slight improvement is likely, though factory activity will probably remain subdued.