The manufacturing activity in the United States is increasing more than it was expected and has recently hit a 14 year high, in the month of August. This hike in the activity is said to have boosted by many things that include the surge in the new orders. But despite all this, with the increase in the bottlenecks particularly in the supply chain because of the state of the economy along with the import tariffs, the growth can be, in a way, restrained up to some extent.
A survey that was published this Tuesday revealed that a peak in the manufacturing is expected earlier and also pointed towards the slowdown in the coming months, which is said to be against the backdrop of the dollar being very strong. Some other surveys have pointed towards the cooling particularly in the factory activity in the region. Because of the fast appreciation of the dollar, the export orders have started to decline in the past few months.
Speaking of the growth of the factory sector in the region, it is still expected to be very sluggish in the coming quarters, as per a senior economist who works at the Capital Economics located in New York and is named Michael Pearce. The ISM, i.e. Institute of Supply Management concluded after a survey that the index of the national factory activity has jumped to nearly 61.3 in the last month which is the best since 2004, in the month of May.
The economists have warned about the tariffs which have high potential to disrupt the supply chains in many ways and are also able to undercut the investment in the businesses in the region and can slow the momentum of the economy as well, by a significant margin, in the coming months, among a few other things being affected by the same.