US Manufacturing Shows Resilience Amid Middle East Conflict, Expert Says

According to Jin10, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, commented on the US March PMI data, noting that the US manufacturing sector has demonstrated encouraging resilience amid the outbreak of war in the Middle East. Business confidence in future output remains strong so far. This ongoing resilience is partly due to reduced concerns over government policies and suggests that manufacturers expect the impact of the war to be short-term and limited, though uncertainty persists. Currently, the conflict's impact is in its early stages, with sharp price increases and delivery delays casting a shadow over the outlook, potentially driving inflation, suppressing demand, and disrupting supply chains. Driven by soaring oil prices, factory input costs have risen significantly, and supplier delays are more common than at any time since October 2022. As a result, some manufacturers are increasing inventories to prepare for future price hikes or supply shortages, while hiring has nearly stalled to reduce labor costs, highlighting concerns about potential issues the war may cause for factories in the coming weeks.