US Manufacturing Downturn Deepens in May

The ISM Manufacturing PMI for the US increased to 52.7 in March 2026 from 52.4 in February and above forecasts of 52.5. The reading pointed to the strongest growth in factory activity since August 2022, led by a faster increase in production (55.1 vs 53.5) while new orders slowed (53.5 vs 55.8) and employment contracted slightly faster (48.7 vs 48.8). Also, the prices index jumped to 78.3, the highest since June 2022, from 70.5. “The Supplier Deliveries Index indicated a further slowing for the fourth month in a row (58.9 vs 55.1). March "also marks the first report with panelists citing the Iran war as a new impact to their business, along with ongoing uncertainty with U.S. economic policy, despite the recent Supreme Court ruling striking down International Emergency Economic Powers Act (IEEPA) tariffs. In March, 64% of comments overall were negative. Among the negative comments, about 20% cited tariffs and about 40% the war in the Middle East", Susan Spence, Chair of the ISM said.

The ISM Manufacturing PMI slipped to 52.4 in February 2026 from 52.6 in January, but remained above market expectations of 51.8. The reading signaled a second consecutive month of expansion in the manufacturing sector, albeit at a slightly slower pace. A smaller increase was recorded for new orders (55.8 vs 57.1) and production (53.5 vs 55.9) while employment (48.8 vs 48.1) and inventories (48.8 vs 47.6) remained in contraction. At the same time, price pressures intensified, with the subindex hitting the highest since June 2022 (70.5 vs 59), driven by increases in steel and aluminum as well as tariffs applied to many imported goods. Supplier deliveries (55.1 vs 54.4) indicated a further slowing for the third month in a row. "Of the six largest manufacturing industries, four (Chemical Products; Machinery; Transportation Equipment; and Computer & Electronic Products) expanded in February", Susan Spence, Chair of the ISM Manufacturing Business Survey Committee said.

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.