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US manufacturers are increasingly worried about a recession, a recent Fed survey shows.
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Manufacturers said uncertainty from tariffs is negatively impacting business planning and sales.
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The survey from the Dallas Fed shows the business activity index dropped to its lowest level since May 2020.
US manufacturers are ringing the alarm bells for a coming recession, and are begging the Federal Reserve to do something about it.
A manufacturing survey from the Federal Reserve Bank of Dallas this week showed that participants across various industries are fretting about the Trump tariff uncertainty and its impact on their businesses.
“We have seen a 25% drop in incoming RFQs [request for quotations] in April compared with the average of previous months,” one manufacturer in the computer and electronic industry said. “Assuming this continues, we expect to see roughly a 10-15 percent decline in sales in May.”
Another manufacturer said the back-and-forth in tariff headlines and increasing uncertainty mean it’s near-impossible to plan “anything accurately” in the next six months, let alone the next six weeks.
“If this continues for any length of time, many small companies are likely to be significantly hurt or even gone,” one manufacturer said, adding that the risk to businesses is “far greater and less understood” than the COVID shutdown in 2020.
Most of the businesses surveyed want the tariff uncertainty to end as soon as possible, with one manufacturer advocating for the Trump administration to use “a scalpel rather than a sledgehammer” to craft trade policy.
The weakness hitting manufacturers has spured direct appeals to Trump and the Fed.
“President Trump, tariffs and maximum business uncertainty [are issues affecting our business],” a manufacturer said. “[We see a] probable recession soon.”
Meanwhile, manufacturers’ message to the Fed is clear: lower interest rates now.
“Please lower interest rates,” one manufacturer said. “We need it in order to boost the economy due to the uncertainty and tariffs.”
A manufacturer in the transportation equipment industry said “interest rates are too high,” adding that the Fed “always seems to be late for their own party.”
It’s not just the Dallas survey that’s setting off alarms. Other regional manufacturing surveys from Fed banks paint a similar picture, warning of economic shocks from tariffs.
The Philadelphia Fed’s April survey showed that the index for new orders plunged from 8.7 to -34.2 in March, the lowest level since April 2020. Meanwhile, prices paid by firms rose to the highest level since July 2022.
