Is US Manufacturing Headed for a Recession?

By now, most everyone has heard that US manufacturing is contracting. This goes along with the contractions being seen in the Eurozone and Asia.

What I look at are the contractions of production and New Orders and the comments that the Institute for Supply Management puts into their monthly report.  here is what some of the respondents have said:

  • “Internal indicators and feedback from sales channels are indicating a slowdown in demand for capital equipment.” (Machinery)
  • “Business continues to be very solid, but there is now a slowing of incoming orders.” (Fabricated Metal Products)
  • “Incoming orders have slowed somewhat, but indications are that there will be a stronger fourth quarter.” (Plastics & Rubber Products)
  • “Business is slow right now. Companies seem to be holding onto their money.” (Computer & Electronic Products)
  • “We can sense, feel and see headwinds with customer orders, especially Europe related.” (Apparel, Leather & Allied Products)
  • “New orders and backlog remain flat.” (Miscellaneous Manufacturing)
  • “Auto industry slowing a bit in the second half [of the year].” (Transportation Equipment)
  • “U.S. drought severely impacting raw materials prices.” (Food, Beverage & Tobacco Products)
  • “Lackluster demand continues in all regions of the world, and is supporting much lower raw materials prices in the second half of 2012.” (Chemical Products).

Taken all together, these trends are not too favorable for us.  So hold on, the ride could get a little bumpy!  See the full ISM report.