Baffle ‘Em With Bullshit ‘Soft’ Survey Data Continues As Tariff Terror Spreads

Another day, another set of mixed messaging from macro (soft survey) data…

On the bright side, MNI’s Chicago Manufacturing PMI surged higher this morning as March data printed 47.6 (above expectations but still in contraction <50) – the highest since December 2023.

On the not so bright side, The Dallas Fed Manufacturing PMI survey tumbled to -16.3 (well below expectations) – the lowest since July 2024.

It gets better though…

While Chicago’s data shows Prices Paid slowing, New Orders falling, and Inventories falling.

Dallas’ data showed Prices Paid higher, New Orders higher, and Inventories rising…

The Dallas Fed outlook also tumbled as the comments from respondents was almost entirely focused on tariff fears…

• The tariff discussion is driving significant uncertainty and a negative outlook. Project costs are increasing immediately, with significant rises in equipment and piping costs.

• Tariffs and the economy may be a drag on business.

• Tariffs are a constant and increasing source of uncertainty. We do not know what prices we will have to pay for components, and we do not know how customers will respond to increases strictly related to tariffs. Also, it is unknown how the market will change in response to the tariffs and higher costs. We know we will lose opportunities to build products used for other countries because we already have, but will tariffs bring new opportunities from foreign companies wanting to build in the U.S.? That remains to be seen, but the known risk currently seems to outweigh the unknown opportunity.

• Trump, tariffs, massive uncertainty—how can you do business planning with all of this uncertainty and the daily changes in direction made by the Trump administration?

• The cyclical recovery looks like it is continuing. There is lots of noise and uncertainty with tariffs and rumors of trade restrictions.

• Our biggest concern is import taxes and the increase in price that it causes.

• We seem to be in a holding pattern. There’s much uncertainty in our customer base. Tariffs will drive/have driven pricing up for raw materials at a rate far exceeding the true tariff implementation rate. There’s optimism, but there’s also an abundance of trepidation. Ultimately, we sense the underlying economy is stronger than the general public sentiment, so that should bode well for the last half of the year.

• Tariffs! We need to make decisions, but the ball is constantly moving. This is truly ridiculous. I have been in business for 50 years as of next year, and never have I seen such uncertainty in the market. It is very difficult to plan and make decisions.

• The craziness over tariffs is very painful as I’m confident this is a reason for a general malaise we are sensing in our customers. If not for some specific work we do this time of year, we would be stupid slow and in stark contrast to where we were 12 months ago. I’m very worried about what the next six to 12 months will look like, especially if these goofy tariffs become a reality.

• Uncertainty due to tariffs is the wild card. Imports from Mexico and Canada are vital to the business and the industry. U.S. suppliers cannot supply quantities required. The tariffs are definitely inflationary.

• The tariffs will loom large on our market demand. The commercial vehicle industry is still in a freight recession, which drives our overall demand.

We leave you with this final comment…

Despite all of the doomsaying in the press, we are not seeing any drop in orders. 

We have invested heavily in equipment and production capacity in the last 12 months and are seeing the benefits from that now. 

While a short recession is a possibility due to the reductions in government spending, we view this as a net positive for the economy and our business in the medium term.

Finally, we can focus on business rather than policy. It is great to get back to work.

So, who do we believe – Chicagoans or Texans?