U.S. manufacturers say inflation is bad and not getting any better

By Jeffry Bartash

'Every month, we are faced with new headwinds created by this administration,' one executive says

Manufacturers are expanding, but high energy prices and inflation are major bugaboos.

American manufacturers are expanding and have plenty of new orders, but high energy prices and new Trump tariffs appear to be blocking even faster growth.

A survey of top U.S. executives in September showed that inflation is the industry's biggest problem.

"Fuel costs are still affecting transportation costs and the overall cost of goods," an executive at a food manufacturer told the Institute for Supply Management.

"Every month, we are faced with new headwinds created by this administration," a transportation executive said. "This month, it is the trade war with Canada, which every day is getting worse - causing prices to go up and uncertainty that creates massive disruption."

The ISM's price barometer jumped in September to a four-month high after the resumption of hostilities between the U.S. and Iran. It has also returned to near a four-year peak.

The news sparked a backlash in U.S. financial markets. Stocks DJIA SPX turned lower after the ISM report was published at 10 a.m. Eastern time.

Yet even with all the uncertainty, manufacturers grew in September for the ninth month in a row. The ISM's main gauge was virtually unchanged at 54.5%. Any number above 50% indicates business is growing.

"Order levels remain strong and elevated," a senior executive at a maker of fabricated metal parts said. "We have orders through year-end at above forecast levels."

The index of new orders climbed 1.6 points last month to a robust 55.3%.

Some manufacturers are even hiring for the first time in a few years. Job creation was positive for the third straight month, following a 33-month streak of declines.

The ISM surveys executives every month about how their businesses are doing. Manufacturers employ about 13 million people and still play a vital role in the U.S. economy.

-Jeffry Bartash

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10-01-26 1119ET