U.S. Auto Suppliers Report “Deep Concern” Over Trade

March 19, 2019 at 5:02 PM

Auto suppliers in the U.S. are growing increasingly worried about the impact of tariffs and trade conflicts on their business this year, the Original Equipment Manufacturers Assn. reports.

OESA’s Supplier Barometer Index for the first quarter of 2018 sagged to 35 points from 57 a year ago. An index of 50 indicates neither optimism nor pessimism. The current reading is the lowest since the second quarter of 2009.

Suppliers consider trade policy this year’s largest threat, thereby making business decisions harder to make and more likely to be postponed. They also worry about rising materials costs, an issue reported by more than 80% of respondents compared with 60% a year ago.

In spite of their worries, suppliers expect to maintain spending on research and development 4% of total sales, OESA says. The group says most funding is being directed to specific product programs, led by those involving advanced materials and next-generation manufacturing techniques.