U.S. Manufacturing Shrugs Supply Chain Constraints: 5 Picks
Zacks Investment Research | Apr 13, 2018 08:43AM ET
Despite starting the year on a positive note, the benchmark stock indexes lost most of their sheen in the last few weeks, thanks to elevated concerns over an impending trade war between the United States and China.
Given the situation, the U.S. manufacturing sector is rife with apprehension regarding the rise in near-term prices of major inputs, skilled labor shortage and an increase in transportation costs.
However, healthy growth drivers like Trump's impetus to foster infrastructure spending, reduced corporate tax rates as well as a rise in new orders and inventories have proved to be the pillars of strength for the industry.
Although month over month performance has dipped this March, we envision that the U.S. manufacturing industry has enough credentials to spring back to its normal activity levels in the next couple of weeks.
Henceforth, allocating your hard-earned money in selective industrial picks should bear fruit.
Supply-Side Restraints Ailing U.S. Manufacturing
Overall anxiety regarding the probable impact of tariff had intensified after the Institute for Supply Management (ISM) polled its March manufacturing numbers. Falling shy of market expectations of 60.1%, the Purchasing Managers' Index (PMI) touched 59.3%, down 1.5 percentage points from the preceding month.
U.S. manufacturers were worried about a trade war, even before Donald President had formally smacked tariffs on steel and aluminum in late March.
The price index for March was 78.1%, up 3.9 percentage points from the previous month, striking the highest level since 2011. “Original post
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