Input Stories

In October, the U.S. manufacturing sector contracted for the eighth straight month, and at a faster pace than in September (ISM).

• The ISM Manufacturing® PMI decreased to 48.7% from 49.1% last month (numbers below 50 indicate contraction).
• While the four demand indicators showed some improvement despite remaining in contraction territory, the Production Index returned to contraction after growing in September, decreasing from 51.0% to 48.2%.

New orders: The New Orders Index contracted for the second consecutive month but at a slightly slower rate, rising 0.5 percentage points from September.

• The index hasn’t shown consistent growth since a 24-month streak of expansion ended in May 2022.
• Of the six-largest manufacturing sectors, one—transportation equipment—reported an increase in new orders.
• Respondents continued to note concern about near-term demand, primarily driven by tariff costs and uncertainty. 

Exports and imports: The New Export Orders Index contracted for the eighth month in a row but at a slower pace, coming in at 1.5 percentage points higher than September.

• Meanwhile, the Imports Index contracted for the seventh consecutive month but also at a slightly slower rate, up 10.7 percentage points to 45.4% in October.
• Imports continued to contract as tariff pricing results in lower demand compared to prior months.

Employment: The Employment Index contracted for the ninth consecutive month but at a slightly slower pace than the prior month, up 0.7 percentage points from September to 46%.

• Of the six-largest manufacturing sectors, two—transportation equipment and food, beverage and tobacco products—reported increased employment.

Prices: The Prices Index decreased 3.9 percentage points to 58%, indicating that raw materials prices grew for the 13th straight month in September, but at a slower pace.

• Of the six-largest manufacturing sectors, five—machinery; computer and electronic products; transportation equipment; chemical products; and food, beverage and tobacco products—reported increased prices.
• The increase continues to be driven by steel and aluminum price increases impacting the entire supply chain, as well as the tariffs applied to most imported goods.
• Roughly 27.3% of companies reported paying higher prices, down slightly from 32.5% in September but still up from 21% in January.