00:00 Speaker A
Tim, thanks for joining us. Talk to me about stagflation in this print. Is that what you’re seeing?
00:07 Tim
Well, you know, I I think that the biggest message in the report this month is that we’re declining in revenue or we’re declining in output and we’re continuing to release people because we’re not sure about the near term and moderate term future here. So, that’s the real story. You know, this is in uh if you look at the details on this, demand side is still weak. We’ve got three or four demand indicators that are negative and heading in the wrong direction. And that’s pretty much because of the uncertainty. We’re not really sure what this whole tariff portfolio is going to look like. Hopefully this week will add some clarity to it and we’ll be able to move forward because whatever it is, it is. Let’s get on with it. We’re tired of studying it. There are so many different elements and variables to this thing. Listen, I mean here we are a day before release and we still don’t know the details of what tomorrow’s going to look like. So, okay, let’s get that resolved. The input side, we’re stocking up on product to try to avoid tariffs, but it now kind of feels like these tariffs are going to be with us for a while. So, at most, we’re stocking up maybe a quarter worth of material. That will go quickly and we’re going to be into tariff material in short order here. Suppliers are struggling to some extent because we’re still arguing about price increases, as well as probably some blockage at the ports because you have to pay before you can get your product released now. And then like I said, I think the biggest story here is that our production is down, our employment is going down with it. And that’s our investment really in the future, the employment. Remember how hard we worked to staff up in the last four or five years. Well, we’re now going to be cutting into more serious bone here, I think, because we have been destaffing for over a year. And we thought that this would stop probably in January and here we are now at the end of March and we’re still destaffing at a sizable level. The good news is we’re not laying off, we’re attributing down, which means we’re taking it slower and it’s not as expensive. But, you know, hey, the last thing I interesting Madison is, if you did a normalization for the inventory number being high because we did the pull forwards, this would be in the range of 48 48 3. And think of it that way. This is not a disastrous report, but it’s not meeting the growth projections that we started the year with. And and you know, we started the year pretty pretty confident. We’ve had five reports now since the new administration came in place, and we’re pretty much where we were in October before the election. And right after the election, we were feeling really good. Our sentiment is getting worse. We’re down to one to two, meaning of three people, two of them aren’t feeling good.
04:41 Speaker A
Yeah.
