‘Business continues to be severely depressed’, U.S. manufacturers blame tariffs.

American manufacturing contracted for the eighth month in a row, a new survey showed, and there appeared to be no end in sight because of high tariffs imposed by the Trump administration. A closely followed manufacturing index slipped to 48.7% in October from 49.1% in the prior month, the Institute for Supply Management said Monday. Any number below 50% signals contraction. The ISM surveys executives every month about how their businesses are doing. And the complaints came through loud and clear: High and constantly shifting tariffs have raised costs, depressed sales and pressured companies to lay off employees.“Business continues to be severely depressed. Profits are down and extreme taxes (tariffs) are being shouldered by all companies in our space,” said one executive at a maker of transportation equipment.“Steel tariffs are killing us,” another manufacturer told ISM. “The tariffs are still causing issues with imported goods into the U.S.,” an executive at a chemical maker said. “The inflation issues continue.”
New orders contracted for the eighth time in the past nine months. Manufacturers trimmed the size of their labor force. Employment hasn’t grown since January. “[We are] continuing to find ways to reduce overhead, which means letting go of experienced workers,” the transportation executive said. The absence of critical U.S. economic reports due to the government shutdown gives even greater weight to private-sector measures such as the ISM surveys. And what they find is not good news. The U.S. industrial base is not as big as it once was, and the economy is now dominated by services. Yet tariffs are still hurting a key sector that employs nearly 13 million people and contributes significantly to gross domestic product. “Tariffs are weighing on everything,” said Susan Spence, chair of the survey. “It all needs to settle down. The comments from individual respondents suggest that firms are exhausted by all of the back and forth on tariffs since the beginning of April and are suffering mightily as their customers have pulled back significantly,” chief economist Stephen Stanley of Santander Capital Markets said. “The tone is about as bad as it has been at any point this year.” MarketWatch