US Manufacturing Downturn Deepens in May

The ISM Manufacturing PMI for the US unexpectedly rose to 52.6 in January 2026 from 47.9 in December and much better than forecasts of 48.5. The reading showed that economic activity in the manufacturing sector expanded in January for the first time in 12 months, and the most since 2022, amid improvements in new orders (57.1 vs 47.4), production (55.9 vs 50.7), employment (48.1 vs 44.8), supplier deliveries (54.4 vs 50.8), and inventories (47.6 vs 45.7), though employment and inventories still remain in contraction. At the same time, price pressures were little changed (59 vs 58.5). "Although these are positive signs for the start of the year, they are tempered by commentary citing that January is a reorder month after the holidays, and some buying appears to be to get ahead of expected price increases due to ongoing tariff issues", Susan Spence, chair of the ISM Manufacturing Business Survey Committee said.

The ISM Manufacturing PMI for the US fell for a third consecutive month to 47.9 in December 2025, the lowest level since October 2024, compared to 48.2 in November and forecasts of 48.3. The reading showed the US manufacturing activity contracted at a faster rate, led by pullbacks in production (51 vs 51.4) and inventories (45.2 vs 48.9), following increases in November, pointing to recent economic uncertainty in manufacturing. Also, price pressures remained elevated (58.5 vs 58.5). On the other hand, improvements in new orders (47.7 vs 47.4), backlog of orders (45.8 vs 44) and new export orders (46.8 vs 46.2) and the customers’ inventories index remaining in ‘too low’ territory (43.3 vs 44.7) are positive signs for December, but several consecutive months of gains in these indicators are necessary for a longer-term recovery. In addition, employment contracted at a slower pace (44.9 vs 44).

The ISM Manufacturing PMI for the US fell to 48.2 in November 2025, the lowest in four months, compared to 48.7 in September and below forecasts of 48.6. The reading showed that the manufacturing sector contracted for the ninth consecutive month and at a faster pace, led by pullbacks in supplier deliveries (49.3 vs 54.2), new orders (47.4 vs 49.4) and employment (44 vs 46), with 67% of panelists (the same as October) indicating that managing head counts is still the norm at their companies, as opposed to hiring. Also, price pressures intensified (58.5 vs 58) and backlog of orders decreased more (44 vs 47.9). On the other hand, production rebounded (51.4 vs 48.2) and inventories fell less (48.9 vs 45.8). “Looking at the manufacturing economy, 58% of the sector’s GDP contracted in November, matching the previous month’s figure, and the percentage of GDP in strong contraction decreased slightly, at 39% compared to 41% in October", Susan Spence, Chair of the ISM said.