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Home » Trade Tensions, Labor Shortages Loom Over U.S. Factories

Trade Tensions, Labor Shortages Loom Over U.S. Factories

U.S. manufacturing activity slowed in July amid signs that a robust economy and import tariffs were putting pressure on the supply chain, which could hurt production in the long term.

August 2, 2018
Reuters

Other data on Wednesday showed private employers stepped up hiring in July, suggesting strength in the labor market and the overall economy at the start of the third quarter. The economy’s vibrancy was acknowledged by the Federal Reserve, which described activity as “rising at a strong rate.”

But analysts expect the economic momentum to slow because of capacity constraints at factories and cooling global demand.

“The rest of the year will be more challenging,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “Businesses are already having a tough time with tight labor markets and finding qualified workers and they have to deal with higher costs and slowing demand from overseas.”

The Institute for Supply Management (ISM) said its index of national factory activity fell to a reading of 58.1 last month from 60.2 in June. A reading above 50 indicates expansion in manufacturing, which accounts for about 12 percent of the U.S. economy.

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KEYWORDS Global Supply Chain Management Global Trade & Economics HR & Labor Management Industrial Manufacturing North America Regulation & Compliance SC Security & Risk Mgmt
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