Taylor: So, a lot of what we're working with our manufacturers on is not cutting back. It's actually increasing our capacity. It's pressing on the gas. It's being ready for the growth that we see out there on the horizon, which is a very different message than what you're getting from the media right now. So that's why I say follow the data because our leading indicators and forecasts suggest much better times ahead. And my biggest worry is not will manufacturing grow. It's are we going to be able to keep up with the growth that we see coming our way later this year and certainly in the next few years to come.

Michelle: That's good. That's good news to hear for our readers for sure. It's a refreshing message right now.

Taylor: Yeah, yeah, definitely.

Michelle: So, when manufacturers are kind of looking ahead, is there anything you think they should be preparing for the second half of the year or even down the road?

Taylor: You know, again, I talk about this increased demand and this growth coming our way like it's a good thing. And it is. It certainly is. But there are going to be challenges that come along with that growth. And one of those challenges is higher costs, higher inflation. It's not just due to tariffs. Yes, tariffs are part of that, of course. But we do see some higher labor costs coming our way as we look out into the future.

So, my message is there's growth coming and we need to prepare for growth. But some of the challenges that will come along with this growth are higher costs. One comment I make often to our manufacturers is, I'm not worried about your top line, your sales, your revenue. Those numbers are likely to expand, but can we maintain a healthy margin during these next few years of growth because these costs are increasing as well at the same time. So, there's a big initiative to say, yes, sales revenue looks great. But how can we maintain a healthy margin in the face of tariffs and in the face of some of other rising costs?

Michelle: With the changing nature of tariffs, is there anything, I mean, it's hard to know week to week what will be relevant, but is there anything you tell people to, know, wait it out or, you know, just any kind of big picture advice with those?

Taylor: Yeah, you know, a lot of the exercises, we're doing here at ITR are understanding on a more microeconomic scale, which industries are going to be impacted more than others. You know, as an economist, one thing that makes me a little bit grumpy is when folks refer to tariffs as all bad or all good. That's never the case. There are certain industries that are going to perform better than others, and there's certain industries that will be impacted less than others.

So, it really is taking out your magnifying glass microscope and really understanding which industries are going to be more disrupted. The other thing for manufacturers is of course, material costs and input costs are challenges regardless of where we are in the cycle for manufacturers.

So, what we're doing at ITR is taking specific looks at different input costs that our manufacturers have. And again, understanding are they exposed a lot to the global community and imports and tariffs? And what does that mean for the potential price rise? So really this tariff situation for us is an exercise in microeconomics to say, we really need to look at these industries under a microscope and understand where these tariffs will be the most challenging. And I think that's what businesses can do. Businesses have cost of goods and there are so many data sources and benchmarks out there that allow them to understand, where are individual pricing for these different costs going?