The December ISM Manufacturing Index dropped 5.2 points. This is the largest drop since Oct 2008, one of only four times it’s dropped over 5 points in a single month since 1984.
January 1984: -9.4 to 60.5%
October 2001: -5.4 to 40.8%
October 2008: -9.0 to 38.2%
December 2018: -5.2 to 54.1%
Ouch. Hard to have any real discussion on it though, given that the premise needs to be “Given that it can’t possibly be Trump’s trade war, …” This is of course even when companies directly say it’s because of the trade war.
“Growth appears to have stopped. Resources still focused on re-sourcing for U.S. tariff mitigation out of China.” (Computer & Electronic Products)
“Customer demand continues to decrease [due to] concerns about the economy and tariffs.” (Transportation Equipment)
“Starting to see more and more inflationary increases for raw materials. Also, suppliers [are] forcing price increases due to tariffs.” (Food, Beverage & Tobacco Products)
“The ongoing open issues with tariffs between U.S. and China are causing longer-term concerns about costs and sourcing strategies for our manufacturing operations. We were anticipating more clarity [regarding] tariffs at the end of 2018.” (Machinery)
“Business is robust for certain sectors [aerospace] and flat to downward for others [energy]. Tariffs continue to impact business direction and profit.” (Miscellaneous Manufacturing)
Growth appears to have stopped. Resources still focused on re-sourcing for U.S. tariff mitigation out of China.” (Computer & Electronic Products)
Brexit has become a problem due to labeling changes.” (Chemical Products)
Customer demand continues to decrease [due to] concerns about the economy and tariffs.” (Transportation Equipment)
Starting to see more and more inflationary increases for raw materials. Also, suppliers [are] forcing price increases due to tariffs.” (Food, Beverage & Tobacco Products)
The ongoing open issues with tariffs between U.S. and China are causing longer-term concerns about costs and sourcing strategies for our manufacturing operations. We were anticipating more clarity [regarding] tariffs at the end of 2018.” (Machinery)
Business is steady, but pace of incoming orders are slowing.” (Furniture & Related Products)
Business is robust for certain sectors [aerospace] and flat to downward for others [energy]. Tariffs continue to impact business direction and profit.” (Miscellaneous Manufacturing)
Caution seems to be the outlook. Are we in a correction, or is the market getting ready to slow over time?” (Fabricated Metal Products)
No major change in business operations towards the end of 2018; however, we are carefully monitoring oil prices and outside influence from market conditions to better understand our 2019 outlook and capital plans.” (Petroleum & Coal Products)
Customers are hedge buying in December as a result of announced price increases starting in January.” (Textile Mills)