Manufacturing Industry Contracts For Third Straight Month
November 1, 2019
Trump promised to bring back manufacturing. Instead, new data released today shows that the manufacturing sector continues to contract as his tax law has failed to boost business investment in structures like factories as Republicans promised it would.
The manufacturing industry contracted for the third straight month.
Bloomberg: “A gauge of U.S. manufacturing trailed estimates for October and signaled the sector contracted for a third-straight month, with the weakest production level since the last recession. The Institute for Supply Management index rose to 48.3 from a 10-year low of 47.8 the prior month, compared with the median projection for 48.9.”
The Midwest manufacturing sector has contracted in four of the last five months, weakening to its lowest level since 2015.
Financial Times: “A gauge of factory activity in the Midwest weakened to its lowest level in nearly four years, signaling the ongoing trade war continues to weigh on the industrial economy. The Chicago Purchasing Managers Index tumbled to 43.2 in October, data on Thursday showed, down from 47.1 the previous month and missing economists’ expectations. That was the lowest reading since December 2015 and marked the fourth time in five months the index has contracted. Readings below 50 signal that output in the industry is contracting.”
Business investment in structures like factories, which Trump’s tax cut was supposed to boost, continued to plummet last quarter.
Washington Post: “The Republican architects of Trump’s tax cut said a big boost in business investment would prove the effort succeeded. That bump in corporate spending has failed to materialize nearly two years after the cuts passed into law and a new government report found it dropped 3 percent last quarter.”
CNBC: “The fall in business investment included a 15.3% drop in structures investment – which includes construction of new properties or mining wells – and a 3.8% fall in equipment investment, according to analysts at Morgan Stanley.”