00:00 Julie
Susan, it’s great to see you. A lot of really interesting, maybe surprising findings in this survey. I want to just go straight to that price component. 70 and a half for February. These tariffs have been in place for a while now. What why what changed that caused that big jump, do you think?
00:20 Susan
You know, it’s a great question. Um, 11.5. I mean, a double digit jump is big anyway. Um, this is really, really big. Um, I have found nothing about the timing of it and um, it’s a it’s it’s a mystery to me. Um, what’s interesting is that uh we are still in an expansion area. We’re we’re a bit down from last month, but we are still in expansion, um, and really, you know, at 52.4, it’s not much in expansion, but it is there anyway.
00:54 Susan
So, um, prices, um, interestingly enough, when you think about the sectors that are expanding, we we always uh talk about there’s 18 but there’s six that make up 72% of manufacturing GDP. Uh food, beverage, tobacco and petroleum and coal products are the two that are not in expansion. We’ll see if that changes. Um, and, you know, prices, as you mentioned Julie, 20% comes through that area of the world.
01:21 Susan
We will see if that um, puts petroleum and coal back into expansion. It hasn’t been there since September when it was uh, when it was finally in expansion after a period of not. So, the, you know, prices coming through, the questions are, you know, are the tariffs finally being passed through full stop. Um, and then on, you know, on top of the uh recent conflict in the Middle East, we also have a landscape of IEE P uh IEE P tariffs have been struck down, but you have section 232 tariffs, you have section 122 tariffs, which are 150 days in duration.
02:00 Susan
So, um, pricing, I wouldn’t expect to take a big leap down. Um, my hope is that we continue to stay in expansion. Um, the customer inventory index, we’ve been talking about that every month. That’s very, very low. It’s at 38.8. It’s up a bit. Hopefully that is what is triggering orders, but what we really need is certainty around pricing for the customers of these sectors to be comfortable ordering.
02:29 Julie
Yeah.
02:30 Susan
And on top of that, the conflict, uh, certainly for oil and maybe other uh other goods that come through that area, um, anyone’s guess what’s going to happen there, but I wouldn’t be surprised to see prices stay high for a bit.