Manufacturing PMI® At 53.3%; June 2026 ISM® Manufacturing PMI® Report

TEMPE, Ariz.  — July 1, 2026 — Economic activity in the manufacturing sector expanded in June for the sixth consecutive month, 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 53.3 percent in June, 0.7 percentage point lower than in May. The overall economy continued in expansion for the 20th month in a row. (A Manufacturing PMI^® above 47.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index expanded for the sixth consecutive month after four straight readings in contraction, registering 56 percent, down 0.8 percentage point compared to May’s figure of 56.8 percent. The June reading of the Production Index (52.2 percent) is 2.1 percentage points lower than May’s reading of 54.3 percent. The Prices Index remained in expansion (or ‘increasing’ territory), registering 73 percent, a 9.1-percentage point decrease from May’s reading of 82.1 percent. The Backlog of Orders Index registered 50.5 percent, down 1.7 percentage points compared to the 52.2 percent recorded in May. The Employment Index registered 49.7 percent, up 1.1 percentage points from May’s figure of 48.6 percent,” says Spence.

“The Supplier Deliveries Index indicated slowing performance for the seventh month in a row after one month in ‘faster’ territory. The reading of 57.4 percent is down 3.2 percentage points from its May reading of 60.6 percent. (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 51.4 percent, returning to expansion territory and up 1.5 percentage points compared to May’s reading of 49.9 percent. The Customers’ Inventories Index reading of 42.3 percent is 0.4 percentage point lower compared to the 42.7 percent recorded in May.

“The New Export Orders Index returned to contraction territory with a reading of 48.5 percent, 2.1 percentage points lower than the 50.6 percent registered in May. The Imports Index registered 52.9 percent, 0.1 percentage point lower than May’s reading of 53 percent.”

Spence continues, “In June, U.S. manufacturing activity remained in expansion territory, growing at a slightly slower pace as compared to the month before. Of the five subindexes that make up the PMI^®, the New Orders and Production indexes grew slower as compared to the previous month, the Supplier Deliveries Index slowed at a slower rate, and the Employment and Inventories indexes improved with the latter entering expansion territory.

“In June, 34 percent of the comments were positive and 66 percent negative, with a 1-to-1.9 ratio of positive to negative sentiment. Among negative comments, the Iran war was mentioned in 31 percent and tariffs in 17 percent; 50 percent of the panelists mentioned pricing volatility as an issue for their companies.

“In June, two of four demand indicators (New Orders and Backlog of Orders) were in expansion, and the Customers’ Inventories Index remained in ‘too low’ territory, contracting at a faster rate. A ‘too low’ status for the Customers’ Inventories Index is usually considered positive for future production. New Export Orders returned to contraction, losing 2.1 percentage points since May.

“Regarding output, the Production Index is in expansion for the eighth month in a row, and the Employment Index increased by 1.1 percentage points but remained in contraction. Among panelists, 36 percent indicated that managing head counts remains the norm at their companies, while 64 percent are hiring — a near reversal of those numbers from the start of the year (66 percent of companies were managing staff levels in the January report).

“Finally, inputs (defined as supplier deliveries, inventories, prices, and imports) were mixed, with the Supplier Deliveries Index decreasing 3.2 percentage points, the Inventories Index entering into expansion, the Imports Index losing 0.1 percentage point but staying in expansion, and Prices Index relief coming with a 9.1-percentage point drop, a reading of 73 percent versus 82.1 percent in May.

“Looking at the manufacturing economy, 5 percent of the sector’s gross domestic product (GDP) contracted in June, compared to 2 percent in May, and the percentage of manufacturing GDP in strong contraction (defined as a composite PMI^® of 45 percent or lower) was 3 percent, compared to 2 percent in May. The share of sector GDP with a PMI^® at or below 45 percent is a good metric to gauge overall manufacturing weakness. All but one (Petroleum & Coal Products) of the six largest manufacturing industries expanded in June, in the following order: Computer & Electronic Products; Machinery; Transportation Equipment; Chemical Products; and Food, Beverage & Tobacco Products.”

The 14 manufacturing industries reporting growth in June — listed in order — are: Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Textile Mills; Primary Metals; Apparel, Leather & Allied Products; Fabricated Metal Products; Computer & Electronic Products; Machinery; Plastics & Rubber Products; Transportation Equipment; Nonmetallic Mineral Products; Chemical Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The three industries in contraction are: Paper Products; Furniture & Related Products; and Wood Products.

WHAT RESPONDENTS ARE SAYING

• “The conflict in Iran has impacted pricing in every category of raw materials. Especially, items that have a heavy concentration of oil in the components like our adhesives.” [Chemical Products]
• “Continued pressure from conflict in Middle East is resulting in a more conservative approach to capital expenditures. We are seeing an increase in consumables and services purchasing from sectors like chemical analysis, per- and polyfluoroalkyl substances (PFAS), and environmental and pharmaceutical testing.” [Computer & Electronic Products]
• “General purchasing operations are being shaped by (1) moderating but still elevated inflation, (2) higher interest rates and (3) continued policy uncertainty, particularly around tariffs and global trade. While overall economic growth remains resilient, it is slowing as consumer spending weakens under pressure from higher costs for energy and essential goods, reducing demand visibility and increasing cost sensitivity for buyers. Meanwhile, supply chains have stabilized compared to prior years but remain structurally complex, with trade policy volatility, geopolitical tensions and regulatory changes now ongoing cost drivers rather than temporary disruptions. Our organization continues balancing cost control with resilience, shifting sourcing strategies, tightening inventories and prioritizing supplier diversification and risk management.” [Computer & Electronic Products]
• “Retail electronics sales seem to have stabilized to some extent. The pause in tariff changes has been welcomed the last two months, but it’s only a matter of time before more confusion is introduced.” [Electrical Equipment, Appliances & Components]
• “Input costs remain elevated across key categories, driven largely by Middle East conflict impacts and ongoing tariff uncertainty. Supplier lead times have stretched, which is influencing our inventory strategy and sourcing decisions. We are managing exposure through diversified supplier bases and contract structures that balance cost certainty with operational flexibility.” [Food, Beverage & Tobacco Products]
• “Conditions are optimistic but not yet booming for our company, even though many others, it seems, are experiencing growth. Machinery in support of defense and semiconductor manufacturing is very strong, a bright spot for our team. Industrial and medical clients are slow to purchase, focusing more on refurbished and upgraded units versus new ones.” [Machinery]
• “Core business remains solid in the face of ongoing geopolitical uncertainty. Cautiously optimistic that a deal will be reached to reopen the Strait of Hormuz; concerned about ongoing ripple effects even when the strait reopens but situation is highly concerning if the strait remains closed. AI industry continues to have huge capacity consumption for critical electronics. Monitoring impact of U.S. defense industry needs on supplier capacity.” [Miscellaneous Manufacturing]
• “No major changes from last month. With the potential ending of the Iran war, management is expecting us to go back to February pricing structures and plans since the increase in oil prices was driven by the war and not regular market influences.” [Petroleum & Coal Products]
• “Requests from suppliers in Europe and India for ‘energy surcharges’ have stopped this past month. We’re seeing continued capacity growth in the Asia-Pacific region (excluding China), including Vietnam, Thailand and South Korea. Most suppliers are building for the longer term as geopolitical protection from all sides.” [Transportation Equipment]
• “The new Section 232 tariffs continue to destroy our profitability and demand as we have to raise prices to deal with this gigantic tax. Add the ‘incentives’ for our company to pivot to purchasing non-U.S. sourced material, and one realizes the total ineptitude of this tariff policy.” [Transportation Equipment]

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* (31); Aluminum Products (3); Brass (2); Copper (12); Copper Based Products (7); Corrugated Products (3); Electrical Components; Electronic Components (6); Freight (4); Fuel* (4); Memory Components (4); Metal Products (3); Ocean Freight (2); Oil (3); Oil Based Products (3); Packaging Materials (3); Paper Products (3); Plastic Based Products (3); Plastics (4); Printed Circuit Boards; Resins (5); Semiconductors; Steel (8); Steel — Hot Rolled (6); Steel — Stainless (5); Steel Products (7); and Sulfur Products (3).

Commodities Down in Price
Aluminum*; Corn; Crude Oil; Fuel*; and Polypropylene Resin.

Commodities in Short Supply
Electrical Components (12); Electronic Components (16); Memory (6); Semiconductors (4); and Steel — Hot Rolled.

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

JUNE 2026 MANUFACTURING INDEX SUMMARIES

Manufacturing PMI^®
The U.S. manufacturing sector expanded in June for the sixth straight month following a 10-month period of contraction, registering 53.3 percent, a decrease of 0.7 percentage point compared to May. Of the five subindexes that directly factor into the Manufacturing PMI^®, four (New Orders, Production, Supplier Deliveries and Inventories) were in expansion territory, one more than in May. The Employment Index stayed in contraction but improved compared to May. Five of the six largest manufacturing industries expanded in June, with Petroleum & Coal Products the exception. 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 47.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the June Manufacturing PMI^® indicates the overall economy grew for the 20th straight month. “The past relationship between the Manufacturing PMI^® and the overall economy indicates that June reading (53.3 percent) corresponds to a 2-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 expanded in June with a reading of 56 percent, a decrease of 0.8 percentage point compared to May’s reading of 56.8 percent. “Of the six largest manufacturing industries, four (Computer & Electronic Products; Machinery; Transportation Equipment; and Chemical Products) reported increased new orders. Demand sentiment was positive in June, with a 2.7-to-1 ratio of positive to negative comments,” says Spence. A New Orders Index above 51.9 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

The 11 manufacturing industries that reported growth in new orders in June, in order, are: Primary Metals; Apparel, Leather & Allied Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Machinery; Nonmetallic Mineral Products; Fabricated Metal Products; Plastics & Rubber Products; Transportation Equipment; and Chemical Products. The six industries reporting a decline in new orders in June, in order, are: Paper Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Wood Products; and Textile Mills.

Production
The Production Index expanded in June for the eighth month in a row, registering 52.2 percent, a 2.1-percentage point decrease compared to May’s reading of 54.3 percent. “Of the six largest manufacturing industries, four (Computer & Electronic Products; Machinery; Transportation Equipment; and Chemical Products) reported increased production. Panelists had a 2-to-1 ratio of positive to negative comments regarding output,” says Spence. An index above 52 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

The eight industries reporting growth in production during the month of June — listed in order — are: Printing & Related Support Activities; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Primary Metals; Machinery; Transportation Equipment; and Chemical Products. The six industries reporting a decrease in production in June, in order, are: Paper Products; Wood Products; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Textile Mills.

Employment
ISM^®‘s Employment Index registered 49.7 percent in June, 1.1 percentage points higher than May’s reading of 48.6 percent. “The index posted its 33rd consecutive month of contraction after expanding in September 2023. Since January 2023, the Employment Index has contracted in 41 of 42 months. Of the six big manufacturing industries, three (Machinery; Transportation Equipment; and Chemical Products) reported higher levels of employment in June. The panelist comment ratio of hiring to managing/reducing head counts was 1.8 to 1 in June, nearly a reversal of the 1-to-2 ratio at the beginning a year,” 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, nine reported employment growth in June, in the following order: Printing & Related Support Activities; Paper Products; Primary Metals; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; and Chemical Products. The three industries reporting a decrease in employment in June are: Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; and Fabricated Metal Products. Six industries reported no change in employment in June.

Supplier Deliveries^†
Delivery performance of suppliers to manufacturing organizations was slower in June for the seventh consecutive month after one month of faster deliveries. “The Supplier Deliveries Index registered 57.4 percent, 3.2 percentage points lower than May’s reading of 60.6 percent. Of the six big industries, five (Computer & Electronic Products; Machinery; Food, Beverage & Tobacco Products; Chemical Products; and Transportation Equipment) reported slower supplier deliveries,” says Spence. 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 June, in order, are: Textile Mills; Primary Metals; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Nonmetallic Mineral Products; Computer & Electronic Products; Machinery; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Chemical Products; and Transportation Equipment. No industry reported faster deliveries in June. Six industries reported no change in supplier deliveries in June.

Inventories
The Inventories Index registered 51.4 percent in June, up 1.5 percentage points compared to the reading of 49.9 percent in May. “Of the six big industries, three (Machinery; Food, Beverage & Tobacco Products; and Transportation Equipment) expanded inventories in June,” 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 seven reporting higher inventories in June — in the following order — are: Textile Mills; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Machinery; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Transportation Equipment. The five industries reporting lower inventories in June are: Miscellaneous Manufacturing; Primary Metals; Computer & Electronic Products; Chemical Products; and Wood Products. Six industries reported no change in inventories in June.

Customers’ Inventories^†
ISM^®‘s Customers’ Inventories Index remained in “too low” territory in June, with reading of 42.3 percent, a decrease of 0.4 percentage point compared to the 42.7 percent reported in May. (For more information about the Customers’ Inventories Index, see the “Data and Method of Presentation” section below.)

The four industries that reported that customers’ inventories were too high in June are: Textile Mills; Wood Products; Miscellaneous Manufacturing; and Plastics & Rubber Products. The eight industries reporting customers’ inventories as too low in June, in order, are: Fabricated Metal Products; Electrical Equipment, Appliances & Components; Primary Metals; Food, Beverage & Tobacco Products; Machinery; Computer & Electronic Products; Transportation Equipment; and Chemical Products. Six industries reported no change in customers’ inventories in June compared to May.

Prices^†
The ISM^® Prices Index registered 73 percent in June, a decrease of 9.1 percentage points compared to its May reading of 82.1 percent, indicating raw materials prices increased for the 21st straight month. This is the largest decrease in the index since July 2022, when it dropped 18.5 percentage points. Of the six largest manufacturing industries, five — Machinery; Computer & Electronic Products; Transportation Equipment; Chemical Products; and Food, Beverage & Tobacco Products — reported price increases in June. “The Prices Index reading is still being driven by (1) increases in steel and aluminum prices that impact the entire value chain, (2) tariffs applied to many imported goods and (3) increases in petroleum-based products as a result of the Middle East conflict. Higher prices were reported by 55.1 percent of respondents in June, down 11.2 percentage points from May’s 66.3 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 June, the 15 industries that reported paying increased prices for raw materials, in order, are: Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Fabricated Metal Products; Miscellaneous Manufacturing; Machinery; Primary Metals; Wood Products; Plastics & Rubber Products; Paper Products; Computer & Electronic Products; Transportation Equipment; Furniture & Related Products; Textile Mills; Chemical Products; and Food, Beverage & Tobacco Products. Only one industry (Petroleum & Coal Products) reported paying decreased prices for raw materials in June.

Backlog of Orders^†
ISM^®‘s Backlog of Orders Index registered 50.5 percent in June, a decrease of 1.7 percentage points compared to the May reading of 52.2 percent. Of the six largest manufacturing industries, three (Computer & Electronic Products; Chemical Products; and Machinery) reported expansion in order backlogs in June.

The eight industries reporting higher backlogs in June — listed in order — are: Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Computer & Electronic Products; Primary Metals; Chemical Products; Fabricated Metal Products; and Machinery. The six industries reporting lower backlogs in June — listed in order — are: Textile Mills; Wood Products; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing; and Transportation Equipment.

New Export Orders^†
ISM^®‘s New Export Orders Index returned to contraction territory in June, as it registered 48.5 percent, down 2.1 percentage points from May’s reading of 50.6 percent. “Among panelists’ comments, the positive-to-negative sentiment ratio was 1.5 to 1,” says Spence.

Of the 18 manufacturing industries, the four that reported growth in new export orders in June are: Computer & Electronic Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; and Miscellaneous Manufacturing. The nine industries that reported a decrease in new export orders in June — in the following order — are: Wood Products; Petroleum & Coal Products; Apparel, Leather & Allied Products; Plastics & Rubber Products; Paper Products; Food, Beverage & Tobacco Products; Chemical Products; Transportation Equipment; and Textile Mills.

Imports^†
ISM^®‘s Imports Index was 52.9 percent in June, a 0.1-percentage point decrease compared to May’s reading of 53 percent.

The 10 industries reporting higher imports in June — in the following order — are: Wood Products; Textile Mills; Primary Metals; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; and Transportation Equipment. The two industries that reported lower volumes in June are: Printing & Related Support Activities; and Paper Products. Six industries reported no change in imports in June compared to May.

^†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 June was 171 days, the same as May. The average lead time in June for Production Materials was 84 days, a three day increase since May. The average lead time for Maintenance, Repair and Operating (MRO) Supplies was 48 days, the same as May.

Posted: July 1, 2026

Source Institute for Supply Management