Home US: Manufacturing activity is poised to remain depressed in the near term – Wells Fargo
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US: Manufacturing activity is poised to remain depressed in the near term – Wells Fargo

On Tuesday, the ISM Manufacturing Index will be released in the US. Analysts at Wells Fargo expect it to show a rebound from 49.1 to 49.9, modestly below market consensus of 50.3.

Key Quotes:  

“U.S. manufacturers have experienced a great deal of stress as the ongoing trade war, slowing global growth and overall economic uncertainty have taken an increasing toll. Indeed, the headline ISM manufacturing index recently fell into contraction territory for the first time since 2016. Details in the August report, as well as underlying fundamentals, suggest the headline index will remain under pressure for at least a few more months. The forward-looking new orders component fell to 47.2, which ties the cycle low set in 2012, while the backlogs component remained in contraction territory for the fourth straight month.”

“No doubt, increased economic anxiety related to escalated trade tensions and tariffs is weighing heavily on business confidence. With a clear trajectory of further escalation in this trade war (right chart), manufacturing activity is poised to remain depressed in the near term.”

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