![\"\"](\"https:\/\/www.controleng.com\/wp-content\/uploads\/2025\/04\/US-Industrial-Production-Machinery-1536x864-1-1024x576.jpg\")
Source: Board of Governors of the Federal Reserve System (U.S.), Industrial Production: Manufacturing: Durable Goods: Machinery (NAICS = 333) [IPG333S], retrieved from FRED, Federal Reserve Bank of St. Louis; https:\/\/fred.stlouisfed.org\/series\/IPG333S, April 9, 2025.<\/em><\/figcaption><\/figure>\n\n\n\n
The graph above illustrates the decline in machinery production in 2024. For industrial automation suppliers, 2024 experienced significant revenue declines. However, a closer look at the month-by-month data shows signs of recovery starting to emerge in the U.S.<\/p>\n\n\n\n From February 2024 through January 2025, machinery production in the U.S. showed steady gains. While March data is not available yet, progress may have slowed due to uncertainty associated with recent tariff policy changes.<\/p>\n\n\n\n Similarly, the Institute for Supply Management\u2019s Manufacturing Purchasing Manager\u2019s Index (PMI) fell below 50 in March 2025, indicating a contraction in the manufacturing economy after two months of expansion. This suggests that tariff-related uncertainty may be affecting U.S. manufacturing activity.<\/p>\n\n\n\n In discussions with machinery manufacturers, a frequent concern has been uncertainty regarding Trump\u2019s trade policy, including questions about the duration and scope of tariffs. This uncertainty makes it difficult for manufacturers to develop long-term plans and has led some budget holders to delay investment decisions. As a result, capital investment may decrease, potentially affecting industrial production.<\/p>\n\n\n\n This uncertainty is represented below in a series produced by National Bureau of Economic Research called the Economic Policy Uncertainty Index (EPU).<\/p>\n\n\n\n In a paper documenting the development of its Economic Policy Uncertainty Index, the National Bureau of Economic Research analyzed how increased uncertainty affects industrial production. The analysis found that a 90-point rise in the EPU Index was associated with a 1.2% decline in industrial production from baseline levels. The impact may be greater if uncertainty increases further or fluctuates significantly.<\/p>\n\n\n\n Over January and February 2025, the EPU index increased 72 points, and it is likely that it continued to rise in March and April. With uncertainty increasing, industrial production may be negatively impacted. Although this does not necessarily imply a full-year contraction, it could limit the potential for manufacturing growth in 2025.<\/p>\n\n\n\n If the Trump administration adopted a more measured approach to trade policy, it could help support growth in 2025. Trade tensions rising, and the administration has shown no indication of adjusting its approach without major concessions. As a result, by the time tariff-related uncertainty diminishes, the opportunity to regain the early-year growth in U.S. manufacturing may have passed.<\/p>\n\n\n\n![\"\"](\"https:\/\/www.controleng.com\/wp-content\/uploads\/2025\/04\/US-Industrial-Production-Machinery-2-monthly-1024x576.jpg\")
Source: Board of Governors of the Federal Reserve System (U.S.), Industrial Production: Manufacturing: Durable Goods: Machinery (NAICS = 333) [IPG333S], retrieved from FRED, Federal Reserve Bank of St. Louis; https:\/\/fred.stlouisfed.org\/series\/IPG333S, April 9, 2025.<\/em><\/figcaption><\/figure>\n\n\n\nUncertainty over tariff longevity is plaguing manufacturers\u2019 ability to strategize and stifling capital investment<\/h2>\n\n\n\n
![\"\"](\"https:\/\/www.controleng.com\/wp-content\/uploads\/2025\/04\/Economic-Policy-Uncertainty-Index-1024x576.jpg\")
Source: Baker, Scott R., Bloom, Nick and Davis, Stephen J., Economic Policy Uncertainty Index for United States [USEPUINDXM], retrieved from FRED, Federal Reserve Bank of St. Louis; https:\/\/fred.stlouisfed.org\/series\/USEPUINDXM, April 9, 2025.<\/em><\/figcaption><\/figure>\n\n\n\n