S&P Global and the Institute for Supply Management reported conflicting March signals for U.S.
factories.
The S&P PMI edged down to 50.2, barely signaling growth, while the ISMs index fell to 49.0, marking a return to contraction after two months of fragile recovery.Production dropped for the first time since December 2024, new orders sank to 45.2, and hiring stalled as tariffs squeezed margins and clouded demand.
Tariffs on Chinese goods, steel, and aluminum pushed input costs to a 31-month high, spiking the ISM Prices Paid Index to 69.4.Factories passed these costs to consumers, accelerating output prices at their fastest pace since 2023.
Firms stockpiled materials ahead of pending tariffs, lifting inventories to 53.4 despite weakening orders.Export declines eased slightly as Canada and Germany increased purchases, but domestic demand faltered.
The sectors employment index plummeted to 44.7, its lowest since October 2024.Automation and productivity gains erased 30% of manufacturing jobs since 1979, per historical data, limiting hiring even when production rose.
A 2023 study showed Trumps prior steel tariffs cost 75,000 jobs in metal-reliant industries while creating just 1,000 steel roles.Economic Pressures Undermine U.S.
Manufacturing Despite Policy Ambitions.
(Photo Internet reproduction)Policy unpredictability deepened the slowdown.
Over half of manufacturers cited tariff confusion as their top concern, delaying investments and contracts.U.S.
Manufacturing Faces Uncertain FutureThe ISM linked inventory builds to rushed shipments ahead of trade measures, warning these gains could reverse if disputes ease.
Computer and transportation equipment makers defied trends with modest growth, relying on skilled labor and automation.Broader economic resilience offered little relief.
Despite 59 months of overall U.S.
expansion, factories faced 26 months of contraction before Februarys brief rebound.Analysts estimate Trumps tariffs could reduce long-term GDP by 0.2% while raising vehicle prices by $3,000$5,000 annually.
Retaliatory duties on $75B of U.S.
exports further strained sectors like agriculture and tech.Forecasts suggest PMI levels may stabilize near 50 by late 2025 if inflation cools and supply chains adapt.
However, reshoring efforts face hurdles: LG and Samsung opened U.S.
plants post-2018 tariffs, but most firms lack capital to relocate swiftly.Meanwhile, manufacturers increasingly bypass tariffs via factories in Mexico and Vietnam, risking a long-term exodus.
The data underscores a precarious balance.
Tariffs aim to revive domestic production but impose immediate costs that offset potential gains.With global trade volatility persisting, U.S.
factories now navigate a landscape where policy risks outweigh demand signalsa reality no index fully captures.