Member Briefing March 17, 2025
Manufacturing CEO Confidence Drops 30 Percent In March Poll
As President Donald Trump rolled out his global tariff regime, built, at least in part, to grow the U.S. manufacturing sector, the immediate result has been to unnerve manufacturing CEOs. Their confidence in future business conditions fell more than 30 percent between January and March according to Chief Executive’s latest CEO Confidence Index, from March 4 and 5.
- Manufacturers’ forecast for business conditions 12 months from now dropped to 4.7 out of 10 from 6.8 out of 10 in January. That is lower than any point during the Covid-19 pandemic. CEOs in other industries are slightly more optimistic, forecasting future conditions at 5.1 out of 10.
- Their rating of current business conditions also took a major tumble in our March poll, down 23 percent to 4.6 out of 10 on a scale where 1 is Poor and 10 is Excellent.
- Asked what they think about the Trump administration’s tariffs, 79 percent of manufacturing CEOs said they anticipate negative effects with one-third expecting short-term negative effects and 46 percent expecting lasting negative effects. When asked to share what this all means for their companies:
- 47 percent anticipate revenues to grow in 2025 (vs. 91 percent in January)
- 40 percent expect profits to increase (vs. 80 percent), while 46 percent expect profits to decrease in 2025 (compared to only 9 percent in January)
- 29 percent plan to increase capex (vs. 53 percent)—instead, 35 percent now plan to pull back on their capital expenditures, up from 16 percent in January)
- 23 percent plan to add to their headcount (vs. 48 percent)—though that doesn’t mean layoffs either; only 12 percent are planning to reduce their headcount. The others say they’re either not sure yet (15 percent) or are simply keeping the status quo (50 percent).
PPI = 3.2%. The Wholesale Price Measure Was Flat In February
Wholesale prices were flat in February providing some more welcome news on inflation amid tariff fears, the Bureau of Labor Statistics reported Thursday. The producer price index, considered a leading indicator for pipeline inflation pressures, showed no gain for the month after jumping an upwardly revised 0.6% in January, seasonally adjusted figures showed. Economists surveyed by Dow Jones had been looking for a 0.3% increase. On a year-over-year basis, headline producer prices increased 3.2%, well ahead of the Fed’s 2% goal though below the 3.7% pace in January. The core PPI was up 3.4% in February, down 0.4 percentage point from January.
Excluding food and energy, core PPI decreased 0.1%, also against an estimate for a 0.3% rise and the first negative reading since July. Core prices excluding trade services showed a gain of 0.2%, also below a 0.3% estimate. A 0.2% drop in services prices offset a 0.3% increase in goods. Two-thirds of the rise in goods came due to a 53.6% surge in chicken egg prices, the BLS said. Eggs have soared in part because of avian flu that has hit supplies, though there is some evidence that prices have eased in March as outbreaks have slowed. On the services side, more than 40% of the decline came from a 1.4% decrease in margins for machinery and vehicle wholesaling.
University of Michigan: Consumer Confidence Nosedives and Inflation Expectations Jump
Consumer sentiment tumbled in March as the impacts of President Donald Trump's tariff policies and elevated price increases remain top concerns for Americans. The latest University of Michigan consumer sentiment survey released Friday showed sentiment hit its lowest level since November 2022. The index slid to a reading of 57.9, below the 64.7 seen last month and the 63 expected by economists.
Pessimism over the inflation outlook soared again in March as one year-inflation expectations jumped to 4.9% from 4.3% the month prior. Just two months ago, consumers had only expected inflation of 3.3% over the next year. Long-run inflation expectations, which track expectations over the next five to 10 years, climbed, too, hitting 3.9% in March, up from 3.4% in February. This marks the highest level of long-term inflation expectations since 1991. Also in the release, the expected change in unemployment hit its lowest level since the Great Financial Crisis.
Global Headlines
Middle East
- U.S. Launches Military Strikes in Yemen– WSJ
- Iran Rejects Nuclear Talks As UAE Delivers Trump's Letter - BBC
- Houthis Take 'Extreme' Steps To Protect Leader In Resuming Israel Attacks - Newsweek
- Second Iranian Ship Suspected Of Carrying Missile Ingredient Leaves China - VOA
- U.S. Talks With Hamas Were a One-Off, Says Trump Administration - WSJ
- High Stakes As Iran Nuclear Issue Reaches Crunch Moment - BBC
- Islamic State Leader for Iraq and Syria Killed, Iraqi PM Announces - Newsweek
- UN Accuse Israel Of Sexual Violence And 'Genocidal Acts' In Gaza - BBC
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- US Has ‘Cautious Optimism’ On Ukraine Ceasefire After Trump Envoy’s Moscow Visit – Politico
- Russia Overpowers Bold Ukrainian Military Venture in Kursk - WSJ
- After Trump Request, Putin Says He Will Let Ukraine Troops In Kursk Live If They Surrender - Reuters
- Putin Ramping Up Troops on Border for New Attack: Zelensky - Newsweek
- 4.5 Million Drones Is A Lot Of Drones. It’s Ukraine’s New Production Target For 2025. - Forbes
- A Plan for Peace Through Strength in Ukraine – Foreign Affairs
- US Quietly Tightens Russia Sanctions as It Seeks Ceasefire - Bloomberg
- Putin Suggests Concessions Needed Before Agreeing To Ceasefire - Forbes
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
Other Headlines
- Philippines' Duterte Was 'Abducted,' Too Ill To Testify At ICC: Lawyer – Nikkei Asia
- EU Unveils Plan To Cut Bureaucracy And Boost Competitiveness: The Simpler The Better? – France 24
- Germany’s Merz Secures Breakthrough On Gargantuan Spending Plan - Politico
- Trump Admin Says South African Ambassador 'No Longer Welcome' in US - Newsweek
- Mark Carney Sworn In As Canada's Prime Minister As Justin Trudeau Steps Down - BBC
- EU Lays Out ‘Massive Investment’ Boost In Defense To Deter Russia - Politico
- Canada Beefs Up Border Security Amid Increasing Pressure From US – France 24
- China Is Unhappy With BlackRock Ports Deal in Panama– WSJ
Policy and Politics
Pentagon To Unveil Cuts Alongside Fiscal 2026 Budget Request
Pentagon leaders plan to roll out their recommended cuts to military spending alongside their budget request for fiscal 2026, the Defense Department indicated in a newly released letter to Congress. The letter, addressed to House Armed Services Chair Mike D. Rogers, R-Ala., and dated March 5, states that Congress will be informed of the results of the so-called budget relook — which called for an internal realignment of 8 percent of the Defense Department’s budget — as the president’s spending request is made public in the coming weeks.
Hughes noted that Defense Secretary Pete Hegseth previously tasked senior department leaders, combatant commanders and others to review the fiscal 2026 budget estimates, with an intent “to reallocate resources away from low-impact areas, such as DEI and climate change programs, to capabilities focused on lethality and readiness.” It’s not clear yet which capabilities or accounts could be caught up in the DOD review or the Department of Government Efficiency’s assessment of the Pentagon, which is underway as the entity spearheaded by Elon Musk looks for fraud and waste in federal departments and agencies. Hegseth’s memo exempted 17 categories of programs from consideration, including operations at the U.S. southern border, Virginia-class attack submarines, missile defense, munitions, one-way attack drones and more.
Trump Signs Funding Bill To Avert A Government Shutdown
President Donald Trump on Saturday signed into law a six-month funding bill, averting a government shutdown. In a post on X, White House Spokesperson Harrison Fields said Trump signed the bill and thanked Democrats who joined Republicans to approve the continuing measure.Trump's signature comes after the Senate passed the bill on Friday just hours ahead of a midnight deadline. The GOP legislation is not a typical stopgap measure, known as a continuing resolution or CR, that simply extends funding at current levels. The 99-page spending bill includes a slight increase in military spending and a $13 billion cut in domestic nondefense spending.
The vote was 54-46, with two Democrats joining all but one Republican in support of the measure. Earlier Friday, the bill cleared a key procedural hurdle with the help of 10 Democrats in a 62-38 vote. Sixty votes were needed to defeat a Democratic filibuster. The votes came after a dramatic 48-hour period during which Senate Minority Leader Chuck Schumer, D-N.Y., broke with most House and Senate Democrats, announcing he would support moving forward on the bill one day after he declared it didn't have the votes. Schumer ultimately voted no on final passage of the legislation.
DiNapoli: Federal Funding Uncertainty Jeopardizes Impact of Inflation Reduction Act for New Yorkers
A new report by State Comptroller Thomas P. DiNapoli details New York’s financial impact from the 2022 Inflation Reduction Act (IRA), including close to $2 billion in funds for environmental and energy purposes that could help lower costs to consumers during New York’s transition to clean energy. DiNapoli warns there is now significant uncertainty about whether this funding will continue after a new executive order issued by President Trump. On Jan. 20, President Trump issued an executive order titled “Unleashing American Energy,” which under a section designated “Terminating the Green New Deal,” directs all agencies to pause payments for IRA grant funds. In addition, the repeal of IRA tax credits has been identified as a possible way to pay for reauthorization or expansion of provisions of the 2017 Tax Cuts and Jobs Act, bringing significant uncertainty regarding future funding.
New York state agencies and authorities have been awarded grants totaling more than $1.3 billion from IRA programs for a range of specific greenhouse gas reducing activities and funds to support incentive programs; however, only a small amount of this funding has been received. Since the programs these grants support are currently financed almost exclusively through charges on the electric and gas bills of the state’s utility customers, these grants could offset a portion of these charges and help to make the clean energy transition more affordable for consumers.
Read more at the Comptroller’s Website
Trump’s First 100 Days
- Judge Temporarily Blocks Trump's Use Of Wartime Powers To Target Venezuelan Gang Members - Reuters
- Vance Says US Manufacturing Can Rebound Despite Tariff Jitters And Falling Markets – Yahoo Finance
- Here’s Where Trump’s Approval Rating Stands On Key Issues – The Hill
- Protesters Occupy Trump Tower Following Arrest Of Columbia Student– Reuters
- Trump Takes Birthright Citizenship To The Supreme Court - NPR
- GOP Lawmakers Tackle Challenge Of Turning Trump Actions Into Laws - Politico
- Countries Considered For Trump's Potential New Travel Ban - Reuters
- Here’s Where Trump’s Government Layoffs Are Targeted—As Judge Orders Reinstatement Of Thousands Of Fired Workers - Forbes
- White House Vows To Fight Ruling That Requires Government Reinstate Fired Probationary Workers – The Hill
- Many Americans See Trump's Actions On Economy As Too Erratic, Reuters/Ipsos Poll Finds - Reuters
- IRS Chief Counsel Pushed Out After Reported Clash With DOGE - Forbes
- Trump Administration Empties Guantánamo Of Migrants, Flies All Back To US – The Hill
Health and Wellness
Generation Xanax: The Dark Side of America’s Wonder Drug
Over the past six decades, hundreds of millions of people have taken Xanax (the brand name for alprazolam) or one of its cousins in the benzodiazepine family—Klonopin (clonazepam); Ativan (lorazepam); and Valium (diazepam)—to lull them to sleep or deliver instant calm in an age of abiding anxiety. Psychiatrists and primary-care doctors regularly prescribe the drugs for everything from mild anxiety to insomnia, making benzodiazepines some of the most commonly prescribed psychiatric medications in America. The pills’ omnipresence has left a mark on pop culture, turning up in Lil Wayne songs and HBO’s “The White Lotus” as bearers of chemical tranquility.
But as concerns increase about potential adverse effects of these drugs, some patients who try to quit are suffering what amounts to a hangover they can’t escape. The problems are far from universal, but a subset of patients are finding it is almost impossible to taper off without suffering through anxiety that is far worse than before, including cycles of agitation that make it impossible to sit still, memory loss, nausea and more. Doctors describe the unique impact of benzodiazepine withdrawal for them as something akin to a neurological disorder.
Industry News
From Champagne to Bourbon, Alcohol Lands on Front Lines of Global Trade War
Alcohol has landed on the front lines of a global trade war, throwing French wines, Irish whiskeys, Kentucky bourbon, Japanese beer and Mexican tequila into the crossfire between the U.S. and its biggest trading partners. In the Canadian province of Ontario, liquor stores have cleared their shelves of California wine and Tennessee whiskey, replacing them with local varieties and signs declaring: “For the good of Canada.” A restaurant wine director in Washington state is dreading the arrival of shipping containers full of European wine so expensive it’s unsellable. The Kentucky governor is pleading for the survival of his bourbon industry. And makers of American sparkling wines are poised to make a windfall.
President Trump on Thursday opened a new front, threatening a 200% tariff on U.S. imports of all alcoholic beverages from the European Union. Trump’s salvo was a response to the EU’s decision to move forward on a 50% levy on American whiskey.
Supply Chain Sees High Theft Rates in 2024
Risk continues to increase as a new 2024 global report and analysis from BSI Consulting. Thefts rose 77% globally and accounted for nearly a third (32%) of all incidents last year, against a backdrop of inflation and rising food prices in many major economies. In 2024, food, drinks, and agricultural products continue to be the top commodities at risk of theft in the global supply chain. Other key findings:
- Electronics accounted for 9% of all product thefts in 2024, with the U.S. as the top location, recording 23% of all regional product thefts last year and the only country to surpass Brazil in any product category.
- Notably, pharmaceutical thefts saw a 136% increase in 2024, while representing only around 6% of recorded cargo theft incidents in the U.S. and 2% globally. This is a mark of continued theft underreporting and its high value per incident underscores significant risks to the industry.
- Hijacking theft was the most frequent tactic globally, accounting for 21% of all incidents (+10% in 2023). However, in the U.S., hijackings only accounted for 4% of all incidents,
- Theft of vehicle (22%), theft of container or trailer (16%), and fictitious pickup (15%) the most common methods in the U.S. The retail industry was particularly impacted by this type of theft as incidents rose from 9% in 2023 to 11% in 2024.
- Overall, two fifths (41%) of all global thefts occurred in-transit, 21% from warehouses, 4% at unsecured roadside parking, and 4% from parking lots. Thefts from containers and trailers were down 7%, as thieves globally stole cargo in the form of entire vehicles (+273% and accounting for a fifth of all cargo thefts).
Read more at Material Handling & Logistics
Army Awards 10 Spots on $4.2B Contract for Aerostat Production
The U.S. Army has selected 10 companies for a potential 10-year, $4.19 billion contract to produce and supply lighter-than-air systems, tethered platforms and elevated sensors to the service branch. The military branch will obligate funding and determine work locations upon award of each task order. Contract work is expected to run through March 12, 2035. In April 2024, the Army solicited information on potential industry sources that could produce, field and provide sustainment and life cycle services for aerostat systems used to support intelligence, surveillance and reconnaisance missions. These include large, medium and tactical Persistence Surveillance Systems Tethered, or PSS-T, aerostats and Persistent Surveillance Dissemination System of Systems.
The awardees are: Advanced Technology Systems, Elevated Technologies, Leidos, Mission Solutions Group, QinetiQ, RTX subsidiary Raytheon, Skyship Services, TCOM, Thunderbolt, Tyonek Technical Services.
GE Aerospace Invests $1B To Expand Manufacturing Capacity And Enhance Engine Production In The U.S
GE Aerospace has announced plans to expand facilities in several U.S. states to strengthen its aerospace manufacturing capacity. The company, which designs and produces commercial and military engines, has committed $1 billion toward enhancing manufacturing capabilities and scaling the production of advanced materials and engine components. This investment is set to create around 5,000 new jobs, including manufacturing and engineering roles, across the U.S.
GE Aerospace is investing $500 million to expand its capacity and improve quality and delivery, particularly for the narrowbody CFM LEAP engine, with a 15-20% increase in deliveries expected this year. Key investments include facility upgrades in Greater Cincinnati; Muskegon, Michigan; Durham, North Carolina; and Lafayette, Indiana, as well as a $200 million commitment to military engine production, such as the T901 Black Hawk and Apache helicopter engines. Additionally, GE Aerospace is investing over $100 million to scale innovative materials and parts, focusing on additive manufacturing and ceramic matrix composites (CMCs) to enhance engine performance.
How A Sub-Contractor’s Faulty Parts On Boeing's 787 Jets Flew Below The Radar In Italy
On a Saturday morning in May, 2020, Italian police officers caught two men pouring chemical waste into the sewers in the southern port city of Brindisi, near a small plane components factory. Five years on, that routine pollution case has spiraled into a wide-ranging judicial investigation into how thousands of flawed titanium and aluminium parts manufactured in Italy ended up in nearly 500 Boeing 787 jets still in use.
The probe focuses on how tiny aero-part-maker Manufacturing Process Specification (MPS) allegedly defrauded clients by using cheaper and weaker metals to make floor fittings and other plane parts. Company executives deny the charge. A preliminary hearing on the case was due to open in Italy on Thursday, but was postponed at the last minute until May 15. With the help of whistleblowers, police found that MPS and its predecessor company had bought very small quantities of the prescribed metals required for 787 jets, including a tough titanium alloy, switching instead to cheaper and less resilient pure titanium, they said. Prosecutors allege that for four years parts made with the wrong type of metal flowed into the aerospace supply chain via Italian group Leonardo, which builds two fuselage sections for the Boeing 787 at its nearby Grottaglie plant.
GM Using AI In Manufacturing And Advancing Toward Level 3 Autonomy On The Road
General Motors has shared how it’s using AI to make manufacturing improvements and the roadmap for autonomous vehicle development following the company’s decision to combine its defunct Cruise operation with its Super Cruise team. GM says it’s leveraging AI technology to enhance safety, improve quality, and enable efficiency in its manufacturing facilities. AI and advanced software help GM’s team “minimize ergonomic stressors, enable workplace safety, and enhance quality” in its manufacturing plants.
“Investing in our current and future workforce with better technology helps ensure that our teams have the skills and tools needed as we continue to evolve our manufacturing footprint to meet customer demand,” GM said in a press release. “We’re always looking for ways to grow our manufacturing capabilities and support our teams to make the vehicles our customers love.”
Read more at Repairer Drive News
Stuck NASA Astronauts One Step Closer To Home After Spacex Crew-Swap Launch
NASA and SpaceX on Friday launched a long-awaited crew to the International Space Station that opens the door to bringing home U.S. astronauts Butch Wilmore and Suni Williams, who have been stuck on the orbital lab for nine months. SpaceX's Falcon 9 rocket lifted off at 7:03 p.m. ET from NASA's Kennedy Space Center in Florida carrying four astronauts who will replace Wilmore and Williams, both of whom are veteran NASA astronauts and retired U.S. Navy test pilots and were the first to fly Boeing's faulty Starliner capsule to the ISS in June
Otherwise a routine crew rotation flight, Friday's Crew-10 mission is a long-awaited first step to bring the astronaut duo back to Earth - part of a plan set by NASA last year that more recently has been given greater urgency by President Donald Trump. After the Crew-10 astronauts' ISS arrival on Saturday at 11:30 p.m. ET, Wilmore and Williams are scheduled to depart on Wednesday as early as 4 a.m. ET, along with NASA astronaut Nick Hague and Russian cosmonaut Aleksandr Gorbunov. Hague and Gorbunov flew to the ISS in September on a Crew Dragon craft with two empty seats for Wilmore and Williams.
Carmakers Are Reinventing the Gear Shifter and Drivers Are Lost
A proliferation of electronic controls have allowed car engineers to largely ditch the mechanical connections between the gear lever and the transmission. Disappearing are the familiar, bulky shifters typically mounted on the steering column or center console. “Once you eliminate that mechanical linkage, then anything goes,” said Paul Snyder, a former Ford designer who’s now chair of the College for Creative Studies’ transportation design program.
Today, many cars come outfitted with small joystick shifters, dials, buttons and even touch screen gearshifts. The smaller, more-exotic designs free up interior space for phone chargers and cupholders. They also can flummox people when they get behind the wheel of a car they’ve never driven. On a trip to California, Linda Hoff, 65, rented a Nissan Rogue SUV that had a joystick-like gear selector. Hoff frequently rents different car brands but nonetheless couldn’t figure out how to reverse the car out of its spot. “I didn’t even know how to drive this damn car,” she said. “So I had to go back to the rental agency and say, ‘Is there a trick here?’” She was soon on her way after a tutorial.