TEMPE, Ariz. — November 3, 2025 — Economic activity in the manufacturing sector contracted in October for the eighth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation’s supply executives in the latest ISM® Manufacturing PMI® Report.

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

“The Manufacturing PMI® registered 48.7 percent in October, a 0.4-percentage point decrease compared to the reading of 49.1 percent recorded in September. The overall economy continued in expansion for the 66th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for the second month in October following one month of growth; the figure of 49.4 percent is 0.5 percentage point higher than the 48.9 percent recorded in September. The October reading of the Production Index (48.2 percent) is 2.8 percentage points lower than September’s figure of 51 percent. The Prices Index remained in expansion (or ‘increasing’ territory), registering 58 percent, down 3.9 percentage points compared to the reading of 61.9 percent reported in September. The Backlog of Orders Index registered 47.9 percent, up 1.7 percentage points compared to the 46.2 percent recorded in September. The Employment Index registered 46 percent, up 0.7 percentage point from September’s figure of 45.3 percent.

“The Supplier Deliveries Index indicated slower delivery performance for the third consecutive month after one month in ‘faster’ territory, which was preceded by seven consecutive months in ‘slower’ territory. The reading of 54.2 percent is up 1.6 percentage points from the 52.6 percent recorded in September. (Supplier Deliveries is the only ISM® PMI® Reports index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Inventories Index registered 45.8 percent, down 1.9 percentage points compared to September’s reading of 47.7 percent.

“The New Export Orders Index reading of 44.5 percent is 1.5 percentage points higher than the reading of 43 percent registered in September. The Imports Index registered 45.4 percent, 0.7 percentage point higher than September’s reading of 44.7 percent.”

Spence continues, “In October, U.S. manufacturing activity contracted at a faster rate, with contractions in production and inventories leading to the 0.4-percentage point decrease of the Manufacturing PMI®. A chain reaction of one-month index improvements started with New Orders in August and flowed to Production in September. In October, it manifested in a 1.7-percentage point increase in the Backlog of Orders Index. These short gains have not appeared to translate into sustained growth for the sector, a reflection of continuing economic uncertainty.

“All of the four demand indicators (New Orders, New Export Orders, Backlog of Orders, and Customers’ Inventories indexes) improved, although they are still in contraction territory. The Customers’ Inventories Index contracted at a slower rate. A ‘too low’ status for the Customers’ Inventories Index is usually considered positive for future production.

“Regarding output, production deteriorated and employment contracted at a slower pace, as 67 percent of panelists indicated that managing head count is still the norm at their companies, as opposed to hiring.

“Finally, inputs (defined as supplier deliveries, inventories, prices and imports), are mixed, with the Supplier Deliveries Index indicating slower deliveries, the Inventories Index contracting at a faster rate, and the Prices Index continuing to indicate pricing increases, but at a slower rate. The Imports Index contracted at a slower pace.

“Looking at the manufacturing economy, 58 percent of the sector’s gross domestic product (GDP) contracted in October, down from 67 percent in September, however; the percent of GDP in strong contraction (registering a composite PMI® of 45 percent or lower), is at 41 percent, up 13 percent from September. The share of sector GDP with a PMI® at or below 45 percent is a good metric to gauge overall manufacturing weakness. Of the six largest manufacturing industries, only two (Food, Beverage & Tobacco Products; and Transportation Equipment) expanded in October,” says Spence.

The six manufacturing industries reporting growth in October — listed in order — are: Primary Metals; Food, Beverage & Tobacco Products; Transportation Equipment; Plastics & Rubber Products; Fabricated Metal Products; and Nonmetallic Mineral Products. The 12 industries reporting contraction in October — in the following order — are: Textile Mills; Apparel, Leather & Allied Products; Furniture & Related Products; Paper Products; Printing & Related Support Activities; Wood Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Chemical Products; Machinery; Miscellaneous Manufacturing; and Computer & Electronic Products.

WHAT RESPONDENTS ARE SAYING

“Business continues to remain difficult, as customers are cancelling and reducing orders due to uncertainty in the global economic environment and regarding the ever-changing tariff landscape.” (Chemical Products)

“Decrease in domestic demand for finished products has resulted in slower manufacturing and an increase of raw material in inventory.” (Petroleum & Coal Products)

“In general, business is really strained. Money is sitting tighter, and geopolitical changes add to the uncertainty/risk factor. Even medical fields are feeling the pressure.” (Miscellaneous Manufacturing)

“Sales continue to underperform in our automotive OEM and industrial divisions. Our aerospace and automotive aftermarket are the only areas performing slightly above budget. This is the third month of lower-than-expected sales, and the remainder of the year outlook is not looking better. Sales are expected to be slightly less than in 2024.” (Fabricated Metal Products)

“Tariffs continue to be a large impact to our business. The products we import are not readily manufactured in the U.S., so attempts to reshore have been unsuccessful. Overall, prices on all products have gone up, some significantly. We are trying to keep up with the wild fluctuations and pass along what costs we can to our customers.” (Machinery)

“The commercial vehicle (CV) market remains depressed as customers continue to delay vehicle purchases. Uncertainty in price and transportation demand remains the center of attention. U.S. trade policy and reciprocal actions by China in the form of export controls on rare earths and semiconductors, as well as ocean freight carrier restrictions, have once again caused a lot of stress in supply lines. The CV industry is now bracing for the next round of tariffs focused on commercials vehicles, scheduled to begin on November 1.” (Transportation Equipment)

“The tariff trade war has negatively impacted agricultural export markets, driving down demand and price. This negatively impacts farmer revenue and the likelihood of farmers investing in new equipment.” (Machinery)

“The unpredictability of the tariff situation continues to cause havoc and uncertainty on future pricing/cost. But even with the tariffs, the cost to import in many cases is still more attractive than sourcing within the U.S. Challenges with tariffs on production equipment necessary for internal production makes it difficult to justify expansion of capacity.” (Computer & Electronic Products)

“Volatility in some of our highly exposed commodity markets has tempered a bit, thanks to improved weather conditions and overall downward pressure on pricing. Tariffs continue to remain difficult to quantify, manage and deal with in general, since they continue to impact us day-to-day and our bottom line.” (Food, Beverage & Tobacco Products)

“Wonder has turned to concern regarding how the tariff threats are affecting our business. Orders are down across most divisions, and we’ve lowered our financial expectations for 2025.” (Chemical Products)

ISM ®  Manufacturing PMI ®  Report  data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.

*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price
Aluminum (23); Brass; Copper (4); Copper Products (4); Electronic Components (2); Precious Metals; Steel — Stainless (8); Steel Products* (8); and Zinc.

Commodities Down in Price
Polypropylene Resin (2); Steel (3); Steel — Hot Rolled; Steel — Scrap; Steel Products*; and Transportation.

Commodities in Short Supply
Capital Equipment; Critical Minerals; Electrical Components (4); Electronic Components (8); Labor (2); and Rare Earth Magnets (2).

Note: The number of consecutive months the commodity is listed is indicated after each item.
*Indicates both up and down in price.

OCTOBER 2025 MANUFACTURING INDEX SUMMARIES

Manufacturing PMI®
The U.S. manufacturing sector contracted in October for the eighth consecutive month after two months of expansion preceded by 26 months of contraction. “The Manufacturing PMI® registered 48.7 percent in October, a 0.4-percentage point decrease compared to the 49.1 percent recorded in September. Of the five subindexes that directly factor into the Manufacturing PMI®, one (Supplier Deliveries) is in expansion territory, one fewer than in September. The Production Index returned to contraction territory, losing 2.8 percentage points. The New Orders Index remained in contraction, the Employment Index increased but remained in contraction territory, and the Inventories Index had a faster rate of contraction. Of the six biggest manufacturing industries, two (Food, Beverage & Tobacco Products; and Transportation Equipment) registered growth in October,” says Spence. A reading above 50 percent indicates that the manufacturing sector is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the October Manufacturing PMI® indicates the overall economy grew for the 66th straight month after contracting in April 2020. “The past relationship between the Manufacturing PMI® and the overall economy indicates that the October reading (48.7 percent) corresponds to a change of plus 1.8 percent in real gross domestic product (GDP) on an annualized basis,” says Spence.

THE LAST 12 MONTHS

New Orders
ISM®’s New Orders Index contracted for the second consecutive month in October after one month in expansion, registering 49.4 percent, an increase of 0.5 percentage point compared to September’s figure of 48.9 percent. This reading is above the 12-month average (49.1 percent) for the New Orders Index, which hasn’t indicated consistent growth since a 24-month streak of expansion ended in May 2022. “Of the six largest manufacturing sectors, one (Transportation Equipment) reported increased new orders. For every positive comment about new orders, there were 1.7 comments expressing concern about near-term demand, driven primarily by tariff costs and uncertainty,” says Spence. A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The four manufacturing industries that reported growth in new orders in October are: Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; and Transportation Equipment. The 11 industries reporting a decline in new orders in October, in order, are: Apparel, Leather & Allied Products; Textile Mills; Paper Products; Petroleum & Coal Products; Furniture & Related Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Chemical Products; Computer & Electronic Products; Machinery; and Electrical Equipment, Appliances & Components.

Production
The Production Index contracted in October, registering 48.2 percent, 2.8 percentage points lower than the September reading of 51 percent. “Of the six largest manufacturing sectors, one (Transportation Equipment) reported increased production. Panelists had a 1-to-1.5 ratio of positive to negative comments regarding output,” says Spence. An index above 52.1 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

The four industries reporting growth in production during the month of October are: Primary Metals; Transportation Equipment; Plastics & Rubber Products; and Fabricated Metal Products. The 12 industries reporting a decrease in production in October, in order, are: Apparel, Leather & Allied Products; Textile Mills; Wood Products; Paper Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Nonmetallic Mineral Products; Chemical Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Machinery.

Employment
ISM®’s Employment Index registered 46 percent in October, 0.7 percentage point higher than September’s reading of 45.3 percent. “The index posted its ninth consecutive month of contraction after expanding in January, with seven straight months of contraction before that. Since May 2022, the Employment Index has contracted in 35 of 42 months. Of the six big manufacturing sectors, two (Transportation Equipment; and Food, Beverage & Tobacco Products) reported higher levels of employment in October. For every comment on hiring, there were 3.4 on reducing head counts. Companies continued to focus on accelerating staff reductions due to uncertain near- to mid-term demand. Layoffs and not filling open positions remain the main head-count management strategies,” says Spence. An Employment Index above 50.3 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, three reported employment growth in October: Primary Metals; Transportation Equipment; and Food, Beverage & Tobacco Products. The 13 industries reporting a decrease in employment in October, in the following order, are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Furniture & Related Products; Plastics & Rubber Products; Textile Mills; Electrical Equipment, Appliances & Components; Wood Products; Paper Products; Machinery; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; and Computer & Electronic Products.

Supplier Deliveries†
For the third consecutive month, delivery performance of suppliers to manufacturing organizations was slower in October, after one month of faster deliveries preceded by seven months of index readings in “slowing” territory. The Supplier Deliveries Index registered 54.2 percent, a 1.6-percentage point increase compared to the reading of 52.6 percent reported in September. Of the six big industries, five (Food, Beverage & Tobacco Products; Machinery; Computer & Electronic Products; Transportation Equipment; and Chemical Products) reported slower supplier deliveries. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The 12 manufacturing industries reporting slower supplier deliveries in October — in the following order — are: Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Wood Products; Plastics & Rubber Products; Furniture & Related Products; Nonmetallic Mineral Products; Primary Metals; Machinery; Fabricated Metal Products; Computer & Electronic Products; Transportation Equipment; and Chemical Products. The only industry reporting faster supplier deliveries in October is Paper Products.

Inventories
The Inventories Index registered 45.8 percent in October, down 1.9 percentage points compared to the reading of 47.7 percent in September. “Of the six big industries, two (Food, Beverage & Tobacco Products; and Transportation Equipment) expanded in October,” says Spence. An Inventories Index greater than 44.5 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

Of 18 manufacturing industries, the five reporting higher inventories in October are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; and Transportation Equipment. The 11 industries reporting lower inventories in October — listed in order — are: Textile Mills; Furniture & Related Products; Electrical Equipment, Appliances & Components; Machinery; Wood Products; Petroleum & Coal Products; Chemical Products; Paper Products; Fabricated Metal Products; Miscellaneous Manufacturing; and Computer & Electronic Products.

Customers’ Inventories†
ISM®’s Customers’ Inventories Index remained in “too low” territory in October, with a reading of 43.9 percent, an increase of 0.2 percentage point compared to the reading of 43.7 percent in September. “Customers’ inventory levels in October continued to contract but moved a slight amount toward ‘about right’ territory,” says Spence. (For more information about the Customers’ Inventories Index, see the “Data and Method of Presentation” section below.)

The three industries reporting customers’ inventories as too high in October are: Textile Mills; Petroleum & Coal Products; and Computer & Electronic Products. The 10 industries reporting customers’ inventories as too low in October, in order, are: Primary Metals; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Fabricated Metal Products; Transportation Equipment; Machinery; Chemical Products; Miscellaneous Manufacturing; and Paper Products.

Prices†
The ISM® Prices Index registered 58 percent in October, decreasing 3.9 percentage points compared to the previous month’s reading of 61.9 percent, indicating raw materials prices increased for the 13th straight month (though at a slower rate compared to September). The Prices Index has increased 7.7 percentage points over the past 12 months. Of the six largest manufacturing industries, five: Machinery; Computer & Electronic Products; Transportation Equipment; Food, Beverage & Tobacco Products; and Chemical Products) have reported price increases in October. “The Prices Index reading continues to be driven by increases in steel and aluminum prices that impact the entire value chain, as well as tariffs applied to many imported goods. Higher prices were reported by 27.3 percent of respondents in October, down from 32.5 percent in September and 49.2 percent in April, which was the highest level since June 2022 (65.2 percent),” says Spence. A Prices Index above 52.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

In October, the 14 industries that reported paying increased prices for raw materials, in order, are: Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Primary Metals; Miscellaneous Manufacturing; Textile Mills; Fabricated Metal Products; Machinery; Computer & Electronic Products; Wood Products; Transportation Equipment; Furniture & Related Products; Food, Beverage & Tobacco Products; and Chemical Products. The two industries that reported paying decreased prices for raw materials in October are: Petroleum & Coal Products; and Paper Products.

Backlog of Orders†
ISM®’s Backlog of Orders Index registered 47.9 percent, an increase of 1.7 percentage points compared to the September reading of 46.2 percent, indicating order backlogs contracted for the 37th consecutive month after a 27-month period of expansion that ended in September 2022. Of the six largest manufacturing industries, two (Computer & Electronic Products; and Transportation Equipment) reported expansion in order backlogs in October. “Ongoing contraction in the Backlog of Orders index means that trade issues and other geopolitical tensions are still at play. Significant improvement shouldn’t be expected until those issues begin to recede,” says Spence.

Of the 18 manufacturing industries, the six that reported growth in order backlogs in October, in order, are: Primary Metals; Miscellaneous Manufacturing; Computer & Electronic Products; Fabricated Metal Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. The eight industries reporting lower backlogs in October — in the following order — are: Textile Mills; Paper Products; Plastics & Rubber Products; Machinery; Furniture & Related Products; Nonmetallic Mineral Products; Chemical Products; and Food, Beverage & Tobacco Products.

New Export Orders†
ISM®’s New Export Orders Index contracted in October, registering 44.5 percent, up 1.5 percentage points from September’s reading of 43 percent. “Export orders contracted for the eighth consecutive month after growing in January and February. That brief period of expansion followed an ‘unchanged’ status (a reading of 50 percent) in December, preceded by six straight months of contraction. Ongoing trade friction is still resulting in diminished demand, as evidenced by the 57 percent of panelists’ comments citing soft demand due to tariffs and uncertain U.S. economic policy,” says Spence.

Of the 18 manufacturing industries, only one (Wood Products) reported growth in new export orders in October. The 11 industries that reported a decrease in new export orders in October — in the following order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Furniture & Related Products; Textile Mills; Paper Products; Computer & Electronic Products; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; Transportation Equipment; and Machinery. Six industries reported no change in new export orders in October.

Imports†
ISM®’s Imports Index remained in contraction for the seventh month in October after expanding for three straight months. The October figure of 45.4 percent is an increase of 0.7 percentage point compared to the reading of 44.7 percent reported in September. “Imports continuing to contract indicate ongoing lower levels of demand due to tariff pricing,” says Spence.

The only industry to report higher imports in October was Food, Beverage & Tobacco Products. The nine industries that reported lower volumes of imports in October — in the following order — are: Furniture & Related Products; Wood Products; Petroleum & Coal Products; Machinery; Nonmetallic Mineral Products; Chemical Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; and Transportation Equipment. Eight industries reported no change in imports.

†The Supplier Deliveries, Customers’ Inventories, Prices, Backlog of Orders, New Export Orders, and Imports indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy
The average commitment lead time for Capital Expenditures in October was 168 days, a decrease of 2 days compared to September. The average lead time in October for Production Materials was 80 days, a decrease of one day compared to September. The average lead time for Maintenance, Repair and Operating (MRO) Supplies was 47 days, a decrease of two days compared to September.

Posted: Novedmber 3, 2025

Source: Institute for Supply Management