Manufacturing PMI® At 47.9%; December 2025 ISM® Manufacturing PMI® Report  — Apparel, Leather & Allied Products; Textile Mills Report Contraction

TEMPE, Ariz., — January 5, 2026 — Economic activity in the manufacturing sector contracted in December for the 10th 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 47.9 percent in December, a 0.3-percentage point decrease compared to the reading of 48.2 percent in November and the lowest reading of 2025. The overall economy continued in expansion for the 68th 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 a fourth straight month in December following one month of growth; the figure of 47.7 percent is 0.3 percentage point higher than the 47.4 percent recorded in November. The December reading of the Production Index (51 percent) is 0.4 percentage point lower than November’s figure of 51.4 percent. The Prices Index remained in expansion (or ‘increasing’ territory), registering 58.5 percent, the same as November’s reading. The Backlog of Orders Index registered 45.8 percent, up 1.8 percentage points compared to the 44 percent recorded in November. The Employment Index registered 44.9 percent, up 0.9 percentage point from November’s figure of 44 percent.

“The Supplier Deliveries Index indicated slower delivery performance after one month in ‘faster’ territory. The reading of 50.8 percent is up 1.5 percentage points from the 49.3 percent recorded in November. (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 45.2 percent, down 3.7 percentage points compared to November’s reading of 48.9 percent.

“The New Export Orders Index reading of 46.8 percent is 0.6 percentage point higher than the reading of 46.2 percent registered in November. The Imports Index registered 44.6 percent, 4.3 percentage points lower than November’s reading of 48.9 percent.”

Spence continues, “In December, U.S. manufacturing activity contracted at a faster rate, with pullbacks in the Production and Inventories indexes leading to the 0.3-percentage point decrease of the Manufacturing PMI^®. Those two subindexes increased in November, so their contraction this month continues the short-term “bubble” of improvement indicative in the last several months of PMI^® data — and a hallmark of recent economic uncertainty in manufacturing.

“Although the demand indicators are still in contraction, improvement in three indexes (New Orders, Backlog of Orders and New Export Orders) and the Customers’ Inventories Index remaining in ‘too low’ territory (and at an accelerated rate) are positive signs for December, but several consecutive months of gains in these indicators are necessary for a longer-term recovery. A ‘too low’ status for the Customers’ Inventories Index is usually considered positive for future production.

“Regarding output, the Production Index is still in expansion but slipped 0.4 percentage point, likely due to last month’s drop in the New Orders and Backlog of Orders indexes. The Employment Index contracted at a slower pace, with 63 percent of panelists indicating that managing head counts is still the norm at their companies, as opposed to hiring.

“Finally, inputs (defined as supplier deliveries, inventories, prices and imports) were mixed, with the Supplier Deliveries Index indicating slower deliveries, the Inventories and Imports indexes contracting strongly, and the Prices Index with the same reading as in November.

“Looking at the manufacturing economy, 85 percent of the sector’s gross domestic product (GDP) contracted in December, compared to 58 percent in November, and the percentage of manufacturing GDP in strong contraction (defined as a composite PMI^® of 45 percent or lower) increased to 43 percent, compared to 39 percent in November. 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 Computer & Electronic Products expanded in December,” says Spence.

The two manufacturing industries reporting growth in December are: Electrical Equipment, Appliances & Components; and Computer & Electronic Products. The 15 industries reporting contraction in December — in the following order — are: Apparel, Leather & Allied Products; Wood Products; Textile Mills; Paper Products; Chemical Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Petroleum & Coal Products; Primary Metals; Miscellaneous Manufacturing; Plastics & Rubber Products; Fabricated Metal Products; Machinery; Food, Beverage & Tobacco Products; and Transportation Equipment.

WHAT RESPONDENTS ARE SAYING

• “Winding up the year with mixed results. It has not been a great year. We have had some success holding the line on costs; however, real consumer spending is down and tariffs are ultimately to blame. I hope for some return to free trade, which is what consumers have ‘voted for’ with their spending.” [Chemical Products]
• “Trough conditions continue: depressed business activity, some seasonal but largely impacted by customer issues due to interest rates, tariffs, low oil commodity pricing and limited housing starts.” [Machinery]
• “Things are quieter regarding tariffs, but prices for all products remain higher. Our costs have increased, so we have increased prices for our customers to compensate. Margins have deteriorated, as full pass through (of cost increases) is not possible.” [Computer & Electronic Products]
• “Things are not improving in the transportation equipment market. Many customers are ordering for 2026, but those orders are 20 percent to 30 percent below their historical buying patterns. Some large fleets are still completely on hold for 2026, with zero capital expenditures money available to fleet budgets. Truck rental utilization, which is a good benchmark for the health of the economy, is still below historically stable levels. The general mood of the industry is that the first half of 2026 will be another bust, and we’re now hoping things pick up in the second half, even as the North American truck fleet continues to age.” [Transportation Equipment]
• “In the current environment, our company is struggling with customer orders and financially overall. Our senior leaders are struggling to focus our business and get the company on track with quality products. In November, layoffs impacted about 9 percent of our workforce, affecting all locations in the U.S. and Europe.” [Machinery]
• “Orders continue to drop for most of our businesses. Many plants are not running near full capacity. Make to order being utilized where possible.” [Chemical Products]
• “Order levels have continued to decline: We had a bad October, an awful November and a dismal December. January and February don’t look too good, as bookings are down 25 percent compared to the first two months of 2025.” [Fabricated Metal Products]
• “Morale is very low across manufacturing in general. The cost of living is very high, and component costs are increasing with folks citing tariffs and other price increases. It’s cold in our area of the country, absenteeism is worse around the holidays, and sales were lower than we expected for November. So, things look a bit bleak overall.” [Electrical Equipment, Appliances & Components]
• “Global logistics remains sensitive to geopolitical shifts. Tariffs are influencing equipment pricing and procurement strategies. Large-scale data center programs are absorbing and reducing availability of resources for other sectors.” [Food, Beverage & Tobacco Products]
• “2025 revenue was down 17 percent due to tariffs. The lost revenue has inhibited our ability to offer bonuses to employees or create and hire for new positions.” [Miscellaneous Manufacturing]

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 (25); Brass; Copper (6); Copper Based Products; Critical Minerals (2); Electrical Components (2); Memory; Metals; Natural Gas (2); Steel (2); Steel — Stainless; and Steel Products.

Commodities Down in Price
Cocoa Products; Fuel; Gasoline (2); Oil; and Polypropylene Resin (4).

Commodities in Short Supply
Electrical Components (6); Electronic Components (10); Labor (4); and Rare Earth Components (2).

Note: The number of consecutive months the commodity is listed is indicated after each item.

DECEMBER 2025 MANUFACTURING INDEX SUMMARIES

Manufacturing PMI^®
The U.S. manufacturing sector contracted in December for the 10th consecutive month after two months of expansion preceded by 26 months of contraction. “The Manufacturing PMI^® registered 47.9 percent in December, a 0.3-percentage point decrease compared to the 48.2 percent recorded in November. Of the five subindexes that directly factor into the Manufacturing PMI^®, two (Production and Supplier Deliveries) are in expansion territory, one more than in November. The Production Index stayed in expansion, though it lost 0.4 percentage point. The New Orders and Employment indexes contracted at slower rates, and the Inventories Index decreased by 3.7 percentage points. Of the six biggest manufacturing industries, one (Computer & Electronic Products) registered growth in December,” 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 December Manufacturing PMI^® indicates the overall economy grew for the 68th straight month after contracting in April 2020. “The past relationship between the Manufacturing PMI^® and the overall economy indicates that the December reading (47.9 percent) corresponds to a 1.6-percent increase 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 fourth consecutive month in December after one month in expansion, registering 47.7 percent, an increase of 0.3 percentage point compared to November’s figure of 47.4 percent. This reading is below the 12-month average (48.5 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 industries, one (Computer & Electronic Products) reported increased new orders. For every positive panelist comment about new orders, 1.3 comments indicated concern about near-term demand, driven by tariff costs and other uncertainties,” 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 two manufacturing industries that reported growth in new orders in December are: Computer & Electronic Products; and Electrical Equipment, Appliances & Components. The 13 industries reporting a decline in new orders in December, in order, are: Apparel, Leather & Allied Products; Wood Products; Nonmetallic Mineral Products; Paper Products; Textile Mills; Petroleum & Coal Products; Chemical Products; Primary Metals; Miscellaneous Manufacturing; Fabricated Metal Products; Plastics & Rubber Products; Machinery; and Transportation Equipment.

Production
The Production Index stayed in expansion in December, registering 51 percent, 0.4 percentage point lower than the November reading of 51.4 percent. “Of the six largest manufacturing industries, two (Computer & Electronic Products; and Transportation Equipment) reported increased production. Panelists had a 1-to-1 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 December are: Plastics & Rubber Products; Computer & Electronic Products; Electrical Equipment, Appliances & Components; and Transportation Equipment. The nine industries reporting a decrease in production in December — in the following order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Textile Mills; Wood Products; Chemical Products; Miscellaneous Manufacturing; Fabricated Metal Products; Primary Metals; and Machinery.

Employment
ISM^®‘s Employment Index registered 44.9 percent in December, 0.9 percentage point higher than November’s reading of 44 percent. “The index posted its 11th 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 37 of 44 months. Of the six big manufacturing industries, two (Transportation Equipment; and Machinery) reported higher levels of employment in December. For every comment on hiring, there were three on reducing head counts. Companies continued to focus on accelerating staff reductions due to uncertain near- to mid-term demand. The main head-count management strategies remain layoffs and not filling open positions,” 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 December: Miscellaneous Manufacturing; Transportation Equipment; and Machinery. The 13 industries reporting a decrease in employment in December, in the following order, are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Wood Products; Paper Products; Textile Mills; Petroleum & Coal Products; Nonmetallic Mineral Products; Chemical Products; Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Computer & Electronic Products; and Electrical Equipment, Appliances & Components.

Supplier Deliveries^†
Delivery performance of suppliers to manufacturing organizations was slower in December after one month of faster deliveries. “The Supplier Deliveries Index registered 50.8 percent, a 1.5-percentage point increase compared to the reading of 49.3 percent reported in November. Of the six big industries, three (Computer & Electronic Products; Machinery; and Food, Beverage & Tobacco Products) reported slower supplier deliveries,” says Spence. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The eight manufacturing industries reporting slower supplier deliveries in December, in order, are: Textile Mills; Nonmetallic Mineral Products; Fabricated Metal Products; Primary Metals; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Machinery; and Food, Beverage & Tobacco Products. The four industries reporting faster supplier deliveries in December are: Miscellaneous Manufacturing; Transportation Equipment; Plastics & Rubber Products; and Chemical Products. Six industries reported no change in supplier deliveries in December.

Inventories
The Inventories Index registered 45.2 percent in December, down 3.7 percentage points compared to the reading of 48.9 percent in November. “None of the six big industries expanded in December,” 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 two reporting higher inventories in December are: Nonmetallic Mineral Products; and Electrical Equipment, Appliances & Components. The 10 industries reporting lower inventories in December — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Paper Products; Chemical Products; Primary Metals; Food, Beverage & Tobacco Products; Machinery; Plastics & Rubber Products; Computer & Electronic Products; and Miscellaneous Manufacturing. Six industries reported no change in inventories in December.

Customers’ Inventories^†
ISM^®‘s Customers’ Inventories Index remained in “too low” territory in December, with a reading of 43.3 percent, a decrease of 1.4 percentage points compared to the reading of 44.7 percent in November. (For more information about the Customers’ Inventories Index, see the “Data and Method of Presentation” section below.)

No industries reported customers’ inventories as too high in December. The 11 industries reporting customers’ inventories as too low in December, in order, are: Wood Products; Plastics & Rubber Products; Paper Products; Fabricated Metal Products; Nonmetallic Mineral Products; Primary Metals; Chemical Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Electrical Equipment, Appliances & Components. Seven industries reported no change in customers’ inventories in December.

Prices^†
The ISM^® Prices Index registered 58.5 percent in December, matching its November reading and indicating raw materials prices increased for the 15th straight month. Of the six largest manufacturing industries, four (Machinery; Transportation Equipment; Computer & Electronic Products; and Food, Beverage & Tobacco Products) reported price increases in December. “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 26.4 percent of respondents in December, down just 0.8 percentage point from 27.2 percent in November and compared to 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 December, the 11 industries that reported paying increased prices for raw materials, in order, are: Fabricated Metal Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; Machinery; Primary Metals; Transportation Equipment; Miscellaneous Manufacturing; Wood Products; Nonmetallic Mineral Products; Computer & Electronic Products; and Food, Beverage & Tobacco Products. The four industries that reported paying decreased prices for raw materials in December are: Textile Mills; Plastics & Rubber Products; Paper Products; and Chemical Products.

Backlog of Orders^†
ISM^®‘s Backlog of Orders Index registered 45.8 percent, an increase of 1.8 percentage points compared to the November reading of 44.0 percent, indicating order backlogs contracted for the 39th consecutive month after a 27-month period of expansion that ended in September 2022. Of the six largest manufacturing industries, only Computer & Electronic Products reported expansion in order backlogs in December. “Another month of contraction in the Backlog of Orders Index suggests that trade-related and geopolitical factors persist. Not much improvement is expected until those influences diminish,” says Spence.

The only industry reporting higher backlogs in December is Computer & Electronic Products. The 11 industries reporting lower backlogs in December — in the following order — are: Plastics & Rubber Products; Primary Metals; Textile Mills; Wood Products; Machinery; Paper Products; Transportation Equipment; Miscellaneous Manufacturing; Fabricated Metal Products; Chemical Products; and Electrical Equipment, Appliances & Components. Six industries reported no change in backlog of orders in December.

New Export Orders^†
ISM^®‘s New Export Orders Index contracted in December, registering 46.8 percent, up 0.6 percentage point from November’s reading of 46.2 percent. “Export orders contracted for the 10th 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. Despite a slight improvement in the New Export Orders Index, trade frictions continue to weigh on demand. Many panelists still report softer international orders tied to tariffs and ongoing uncertainty around U.S. economic policy, with a ratio of 1.5 negative comments for every positive one,” says Spence.

Of the 18 manufacturing industries, the five that reported growth in new export orders in December are: Wood Products; Primary Metals; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; and Computer & Electronic Products. The eight industries that reported a decrease in new export orders in December — in the following order — are: Printing & Related Support Activities; Petroleum & Coal Products; Paper Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Fabricated Metal Products; Chemical Products; and Machinery.

Imports^†
ISM^®‘s Imports Index remained in contraction for the ninth straight month in December after a three-month period of expansion. The December figure of 44.6 percent is a decrease of 4.3 percentage points compared to the reading of 48.9 percent reported in November. “Tariff-related pricing pressures are continuing to result in softer demand,” says Spence.

Only one industry, Electrical Equipment, Appliances & Components, reported higher imports in December. The 13 industries that reported lower volumes in December — in the following order — are: Printing & Related Support Activities; Textile Mills; Wood Products; Paper Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Fabricated Metal Products; Primary Metals; Miscellaneous Manufacturing; Machinery; Chemical Products; and Transportation Equipment.

^†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 December was 177 days, an increase of 6 days compared to November. The average lead time in December for Production Materials was 77 days, a decrease of four days compared to November. The average lead time for Maintenance, Repair and Operating (MRO) Supplies was 49 days, an increase of two days compared to November.

Posted: January 5, 2026

Source: Institute for Supply Management