Manufacturing Expands for Tenth Consecutive Month
In October, the U.S. manufacturing sector expanded for the 10th consecutive month and at a faster pace, with the ISM Manufacturing® PMI rising to 55.5% from 54.5% in September. Demand indicators, such as the New Orders, Backlog of Orders and New Export Orders indices, stayed in expansion territory. Meanwhile, the Customers’ Inventories Index remained in “too low” territory, holding steady at 41.6%, a positive sign for future production. At the same time, the Production Index expanded at a faster pace in October, increasing from 56.7% to 59.0%.
The New Orders Index expanded for the 10th straight month in October and at a slightly faster pace, inching up 0.2 percentage point from September to 55.5%. Of the six largest manufacturing sectors, four—machinery; transportation equipment, chemical products; and computer and electronic products—reported increased new orders. Optimism about near-term demand improved slightly, with 1.8 positive comments for every negative comment.
The New Export Orders Index expanded for the fourth consecutive month in October and at a slightly faster rate, ticking up 0.3 percentage point to 51.2%. Respondents expressed greater concern about pricing volatility and longer lead times than in previous months, with 1.3 negative comments for every positive comment. Meanwhile, the Imports Index expanded for the ninth consecutive month and at a faster pace, up 1.9 percentage points to 52.9%.
The Employment Index expanded for the fourth consecutive month but at a slightly slower pace, edging down 0.3 percentage point to 52.4%. Of the six largest manufacturing sectors, four—machinery; transportation equipment; food, beverage and tobacco products; and computer and electronic products—reported increased employment. For every comment about reducing headcount, 1.8 respondents noted hiring.
The Prices Index fell 2.7 percentage points to 75.2% in October, indicating raw material prices grew for the 25th straight month, though at a slower pace than in September. Of the six largest manufacturing sectors, five—machinery; transportation equipment; chemical products; food, beverage and tobacco products; and computer and electronic products—reported higher prices. Price increases continued to be driven by higher steel and aluminum costs throughout the supply chain, tariffs on most imported goods and rising costs for petroleum-based products amid the Middle East conflict. Roughly 53.1% of companies reported paying higher prices, down from 58.6% in September but still well above the 21.0% recorded in January 2025.
