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In November, Philadelphia’s regional manufacturing activity continued to decline but at a slower pace than in October. The index for current general business activity stepped up from -12.8 to -1.7 in November. This month, 31.0% of firms reported decreases in activity, while a smaller 29.2% of firms noted increases. The index for new orders declined to its worse reading since April, falling from 18.2 to -8.6, and the index for shipments decreased from 6.0 to -8.7. Meanwhile, the employment index ticked up 1.4 points to 6.0 as the average employee workweek dropped 9.1 points to 3.7.

The prices paid index increased from 49.2 to 56.1, while the prices received index fell in November from 26.8 to 17.7. As has been the case for many months, the prices received index remained lower than the prices paid index, indicating manufacturers have been absorbing a portion of higher costs paid.

Looking ahead, indicators showing expectations for future growth continued to improve from previous months. After moving up 4.7 points in October, expectations for future business activity surged 13.4 points to 49.6, its highest reading in a year. The index saw both a jump in the firms expecting an increase in activity (47.4% to 54.3%) and a drop in the firms expecting a decrease in activity (11.2% to 4.7%). The future new orders index also moved up from 49.8 to 55.6, while the future shipments index stayed the same from October at 48.4. The capital expenditures index inched up from 25.2 to 26.7. Meanwhile, the future prices paid and prices received indexes both jumped, from 59.8 to 75.1 and 45.7 to 56.8, respectively. Additionally, the index for future employment moved up from 21.4 to 35.7.

In November, firms were asked special questions about price sensitivity and anticipated cost changes. Of those responses, 40.0% of firms indicated their customers have become more sensitive to prices since last quarter, and 60.7% anticipate rising industry costs in the next six months. Of those anticipating rising costs, 68.8% think competitors will respond by raising their prices, with the median response for when the prices will be raised being three months.

Nonfarm payroll employment increased by 119,000 in September, coming in above expectations. On the other hand, July and August’s job gains were revised downward by 33,000 to a gain of 72,000 jobs and a loss of 4,000 jobs, respectively. The 12-month average stands at 109,000 job gains per month. The unemployment rate rose 0.1% to 4.4%, while the labor force participation rate inched up 0.1% to 62.4%.

Manufacturing employment slipped by 6,000 in September, the fifth consecutive month of job losses. Furthermore, the collective job losses in July and August of 14,000 were revised downward by 10,000 jobs to a decrease of 24,000 jobs. Manufacturing employment is down 94,000 over the year, the most of any industry. Durable goods manufacturing employment fell by 4,000 in September, while nondurable goods employment edged down by 2,000. The most significant gain in manufacturing in September occurred in beverage, tobacco and leather and allied product manufacturing, which added 3,300 jobs over the month. Meanwhile, the most significant loss occurred in plastics and rubber products manufacturing, which shed 3,500 jobs over the month.

The employment-population ratio ticked up 0.1% to 59.7% but is down 0.4 percentage points from a year ago. Employed persons who are part-time workers for economic reasons decreased by 170,000 to 4.58 million and are down from 4.62 million in September 2024. Native-born employment is up 676,000 over the month and 2,518,000 over the year. Meanwhile, foreign-born employment is down 70,000 over the month and 670,000 over the year.

Average hourly earnings for all private nonfarm payroll employees rose 0.2%, or 9 cents, reaching $36.67. Over the past year, earnings have grown 3.8%. The average workweek for all employees stayed the same at 34.2 hours but edged down 0.1 hour to 39.9 hours for manufacturing employees.

The Trump administration made a flurry of trade announcements late last week. We covered the most prominent among them—the announcement of four deals with Latin American countries—last week, but here are more pertinent details for manufacturers.

Latin America: On Thursday night, the White House issued joint statements describing key terms of framework agreements with El Salvador, Ecuador, Guatemala and Argentina, which will be finalized “in the coming weeks.”

Tariffs on U.S. goods: Ecuador and Argentina commit to reduce or eliminate tariffs on specific U.S. exports. Guatemala and El Salvador do not include tariff commitments because the 2005 U.S. free trade agreement with Central America eliminated tariffs on U.S. exports.

• Ecuador: Ecuador will reduce or eliminate tariffs in key sectors including machinery, health products, information and communication technology goods, chemicals, motor vehicles and certain agricultural products.
• Argentina: Argentina will provide “preferential market access” for U.S. exports of certain medicines, chemicals, machinery, information technology products, medical devices, motor vehicles and agricultural products. The words “reduce” or “eliminate” are not used.

Nontariff barriers: All four countries commit to address nontariff barriers particular to their markets, including:

• Streamlining regulatory approvals for pharmaceuticals and medical devices (Guatemala, El Salvador);
• Accepting U.S. auto standards (Guatemala, El Salvador);
• Implementing intellectual property rights obligations (Guatemala, El Salvador, Ecuador, Argentina);
• Refraining from digital services taxes (Guatemala, El Salvador, Ecuador);
• Ending pre-shipment inspection mandates and expanding the Authorized Economic Operator program to include express delivery (Ecuador); and
• Accepting U.S. standards and conformity assessment (Argentina).

Switzerland and Liechtenstein: The president announced a framework on Friday for a trade deal with Switzerland and the Principality of Liechtenstein focused on tariffs and investments into the U.S. and a commitment to work on nontariff barriers. Key elements include the following:

• Matching the EU 15% IEEPA rate: The U.S. will reduce Switzerland’s International Emergency Economic Powers Act rate to a maximum of 15%, the same as the European Union. Switzerland has made promises to reduce its trade surplus with the U.S.
• Market access for U.S. exports: Switzerland and Liechtenstein “intend to remove a range of tariffs across agriculture and industrial sectors.”
• Investments: Swiss and Liechtenstein companies will invest at least $200 billion into the U.S., “with at least $67 billion worth of investment occurring in 2026.” Important to the Swiss was to partner to increase the use of Registered Apprenticeships and other training programs in key high-growth sectors, including learning from and collaborating with NAM workforce initiatives.
• Nontariff barriers: Switzerland and Liechtenstein intend to address a range of nontariff barriers, including for U.S. medical devices and autos, and to identify and align international standards to improve access for U.S.-manufactured goods exports. They also agreed to “refrain from harmful digital services taxes.”

What’s next: The U.S., Switzerland and Liechtenstein will work to conclude negotiations in early 2026.

South Korea: In July, the U.S. and Korea announced a Korea Strategic Trade and Investment deal. Last week, the White House posted a fact sheet outlining its elements.

IEEPA tariffs: Under the U.S.–Korea FTA (KORUS), Korea already applied zero duties on U.S. goods. Under this deal, the U.S. will do the following:

• Cap the IEEPA Reciprocal rate at 15%, but some goods receive zero or Most Favored Nation rate: The U.S. affirms the IEEPA rate for Korea will be the higher of either the KORUS rate or the U.S. MFN rate or the IEEPA tariff rate of 15%.
• Apply Annex III exemptions to Korea: The U.S. will apply MFN to the products on the list of Potential Tariff Adjustments for Aligned Partners (Annex III), which include generic pharmaceuticals, ingredients and chemical precursors and certain natural resources unavailable in the United States.

Section 232 tariffs: Foreshadowing forthcoming approaches to the pharmaceutical and semiconductor Section 232 investigations, the U.S. agreed to do the following:

• Reduce Section 232 tariffs on autos/parts and timber/lumber: The U.S. affirms the Section 232 rate for Korea will be reduced from 25% to 15%, inclusive of KORUS and MFN, for autos, auto parts, timber, lumber and wood.
• Reduce any Section 232 tariff on pharmaceuticals to 15%: Prospectively, the U.S. will cap any forthcoming Section 232 tariff on Korean pharmaceuticals at 15%.
• Secure favorable terms for imports of semiconductors: For any Section 232 tariffs imposed on semiconductors, including semiconductor manufacturing equipment, the U.S. “intends to provide terms for such Section 232 tariffs on Korea that are no less favorable than terms that may be offered in a future agreement covering a volume of semiconductor trade at least as large as Korea’s, as determined by the U.S.” It’s unclear if this foreshadows a type of tariff-rate quota.

Read more: You can find a complete list of relevant features here.

The NFIB Small Business Optimism Index edged down 0.6 points to 98.2 in October, remaining slightly above the 52-year average of 98. October’s decrease was due primarily to a decline in earnings trends. Of the 10 components included in the index, four increased, five decreased and one stayed the same. Meanwhile, the Uncertainty Index fell 12 points to 88, the lowest reading of the year but still well above the 51-year average (68) and the average since 2016 (80).

Labor quality was cited as the top concern for small business owners, with 27% reporting it as the most important problem, up 9 points from September. Business owners continue to struggle to fill open positions despite openings trending down, with 32% of small business owners reporting jobs they could not fill in October, unchanged from September. The share of small business owners reporting taxes as a top problem declined 2 points from September to 16%, with some noting high county- and state-level taxes in particular. Meanwhile, inflation again ranked third in the list of concerns, with 12% reporting it as a top problem, down 2 points from September. Looking forward, a net 30% plan to increase prices over the next three months, down 1 point from September.

A net 26% of small business owners reported raising compensation, down 5 points in October after increasing 2 points in September. Meanwhile, 19% of business owners plan to raise compensation in the next three months, unchanged from September. Pressure on profitability worsened in October, falling 9 points from September to a net negative 25%. Among owners reporting lower profits, 33% blamed weaker sales, 16% cited increased material costs, 9% noted price changes for their product(s) or services(s) and 9% said labor costs. Meanwhile, 5% reported their last loan was harder to get than previous attempts, down 2 points from September, and a net 1% of owners cited paying a higher rate on their most recent loan, down 6 points from the prior month.

The outlook for general business conditions fell 3 points to 20%, still a positive read by historical standards. Additionally, 13% reported that it is a good time to expand their business, up 2 points from September, a rather weak reading compared to times of economic expansion. Overall, small business owners remain relatively optimistic, but uncertainty is still high, likely impacted further in October by elections and the government shutdown.

The S&P Global Manufacturing PMI was 52.5 in October, up slightly from the September reading of 52.0. New orders saw their strongest gain in 20 months, although the gain was concentrated domestically. Exports declined for the fourth consecutive month as tariffs impacted sales to key markets, namely Canada, China and Mexico. Meanwhile, higher prices on inputs led to a faster pace of increase in output prices than in September. Although inflation remains elevated in a historical context, inflation was at its lowest level since February.

Production rose over the month, allowing stocks of finished goods to rise for the third consecutive month and at the quickest rate of increase in the 18 years of the survey’s history. If demand and export sales remain weak, this unprecedented rise in unsold stock could result in a decline in output in future months. Meanwhile, delivery times continued to worsen as a result of transportation delays and import challenges from tariffs.

Uncertainty around tariffs continued to weigh on business confidence, with overall business expectations dropping to the lowest level since April. Despite the uncertainty, investment is expected to help boost production over the next year. Uncertainty and excess capacity for manufacturers contributed to limited hiring. Nonetheless, employment rose modestly for a third consecutive month in October.

In October, global manufacturing activity was relatively unchanged from September, ticking up from 50.7 to 50.8. Output and new orders both rose for the third consecutive month in October. Meanwhile, inventories and lead times helped support improved operating conditions, while staffing levels remained stable for the third consecutive month. On the other hand, new export orders contracted for the seventh consecutive month and at a faster pace than September.

India, Thailand, Vietnam and Greece had the highest PMI readings in October. On the other hand, Canada, Brazil, Russia and Mexico were some of the larger nations to register declines in activity. The upturn in manufacturing output occurred across the consumer, intermediate and investment goods categories for the third consecutive month.

Meanwhile, price pressures eased to a five-month low, with investment goods being the only sector to see an acceleration. Forward-looking indicators were mixed, with business optimism falling to a six-month low despite manufacturers expecting gains in output, inventories and input purchases.

In October, the U.S. manufacturing sector contracted for the eighth consecutive month and at a faster pace than the prior month, with the ISM Manufacturing^® PMI decreasing to 48.7% from 49.1% in September. On the other hand, all of the four demand indicators (New Orders, New Export Orders, Backlog of Orders and Customers’ Inventories) improved in October but are still in contraction territory. Meanwhile, the Production Index returned to contraction after growing in September, decreasing from 51% to 48.2%.

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.

The New Export Orders Index contracted for the eighth consecutive month but at a slower pace, 1.5 percentage points higher than September. The continued contraction is likely indicative of dampened demand amid ongoing trade tensions and policy uncertainty. Meanwhile, the Imports Index contracted for the seventh consecutive month but at a slightly slower rate, up 0.7 percentage points to 45.4% in October. Imports continued to contract as tariff pricing results in lower demand compared to prior months.

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. Companies continued to focus on layoffs and attrition to restrict headcounts due to uncertainty around near- to mid-term demand. For every comment on hiring, 3.4 respondents noted reduced headcounts.

The Prices Index decreased 3.9 percentage points to 58%, indicating raw materials prices grew for the 13th straight month in October, 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 higher steel and aluminum prices impacting the entire supply chain, as well as the tariffs applied to most imported goods. Roughly 27.3% of companies reported paying higher prices, slightly down from 32.5% in September but still up from 21% in January.

The federal Registered Apprenticeship program has the potential to help alleviate some of the manufacturing sector’s labor shortage—but it needs strengthening and streamlining to do so, Manufacturing Institute Chief Program Officer Gardner Carrick told the U.S. Senate Health, Education, Labor and Pensions Committee Wednesday.

What’s going on: “Registered Apprenticeship has an opportunity to play a significant role in the growth and scaling of the apprenticeship model in manufacturing,” Carrick said at the hearing “Registered Apprenticeship: Scaling the Workforce for the Future.” “But the program must be value-added.”

• In July, the MI—the NAM’s 501(c)3 workforce development and education affiliate—released “Manufacturing America’s Talent,” its workforce-system improvement roadmap that includes key recommendations for bettering the federal RA program framework.

FAME gives employers what they need: Apprenticeship works, Carrick said, pointing to the MI’s Federation for Advanced Manufacturing Education (FAME) program as evidence. FAME was started in 2010 by Toyota and is today fully run by the MI.

• But for the RA program to work as well—and help fill the many open manufacturing jobs, forecast to reach 3.8 million by 2033 if current trends continue—the federal government must provide flexibility to allow employers to tailor the program’s offerings to their real-world skill needs.
• The fact that just 15% of FAME participants are registered apprentices is evidence that the current system is not meeting needs, Carrick continued.

What should be done: The RA program “must be employer-led, offer a sensible balance between benefits and costs and support the infrastructure needs of our education partners to deliver the skills and competencies that manufacturers are actually asking for.”

What success looks like: Today, FAME works with nearly 500 companies in 45 locations across 17 states. Its graduates—highly skilled maintenance technicians—have a 95% full-time employment rate.

• One study shows that five years after finishing the program, FAME graduates were earning just under six figures annually, Carrick said.
• “In FAME, we achieve these levels of success because the model is employer-led, which means we teach the skills that employers actually demand.”

Read the whole thing: You can read Carrick’s full written testimony here.

Kentucky is one of the top manufacturing states in the U.S.—and the Kentucky Federation for Advanced Manufacturing Education (FAME) is helping keep it that way (Spectrum News 1).

• The state has more than 6,000 manufacturing facilities that together employ more than 260,000 residents and contribute over $47 billion each year to the state’s GDP.

What’s going on: KY FAME represents the Bluegrass State as part of the FAME USA network. FAME is the workforce initiative founded by Toyota and is today supported by the Manufacturing Institute, the 501(c)3 workforce development and education affiliate of the NAM.

• FAME USA, which has eight chapters across Kentucky, develops highly skilled, professional manufacturing talent using a “dual-education apprenticeship style [that] means students earn a full-time salary while they learn, an Advanced Manufacturing Technician certificate and an associate’s degree in two years’ time.”

Why it’s important: Kentucky, like the rest of the U.S., has long experienced a dearth of skilled manufacturing workers. KY FAME is helping build its own pool of talent with a dedicated and novel earn-while-you-learn model that is appealing to both students and manufacturers.

• Program participants work three days a week, Gene Fife, program coordinator of the Greater Louisville Chapter of KY FAME, told Spectrum News 1. “They’re coming to school for two days a week. One that allows them to perhaps graduate debt-free, and they have some money in their pocket for a reward for their hard work.”

Hopeful outlook: Manufacturing jobs in the state are still increasing due to advancements in technology and Kentucky’s growing industrial market.

• “I believe manufacturing is never going to go away,” Fife said. “The advent in AI and a lot of other things have really helped, and with robotics and things like that, we are able to do things in manufacturing we weren’t able to do as little as five years ago. But you always need that person [who] can fix it when it breaks.”

What participants say: “This program as a whole is phenomenal,” said Wyatt Drury, who is in his second year with the Greater Louisville Chapter of KY FAME, working as a maintenance technician at a local carbon steel pipe and tubing manufacturer.

• “It’s helped me out tremendously, and even if my company doesn’t want to hire me, I have open opportunities to go anywhere.”

The last word: “FAME is proof that when manufacturers take the lead in developing their own workforce, everyone benefits—students, companies and communities,” said MI President and Executive Director Carolyn Lee “The Kentucky chapters continue to deliver the skilled talent our industry needs to keep growing and innovating.”

Get involved: Interested in learning more about FAME USA? Go to fame-usa.com to learn more.

Amazon has a new package-sorting robotics system capable of doing the work of three separate stations “in one place,” the retail and technology giant announced recently (CNBC).

What’s going on: “The system, called Blue Jay, is made up of a series of robotic arms that are suspended from a conveyor belt-like track. Those arms are tipped with suction-cup devices that allow them to grab and sort items of varying shapes and sizes.”

The backdrop: The system is the latest in a lineup of robotics Amazon has begun using for an array of tasks, from removing goods from shelves to sorting packages. These investments not only make jobs more efficient, but they also increase safety for employees.

• In May, it unveiled “Vulcan,” a system that has a sense of touch.
• The company’s foray into robotics began in 2012, when it acquired Kiva Systems.

Employee-centered: Amazon, which plans to hire 250,000 workers for full- and part-time roles this holiday season, said “employees remain ‘at the center’ of its robotics development. … [and] its goal is to ‘reduce physically demanding tasks, simplify decisions and open new career opportunities’ for workers.”

Related development: Also recently, the global company unveiled augmented reality glasses for delivery drivers.

• The gadgets, which have been tested by hundreds of drivers, have artificial intelligence, cameras and sensors to scan packages and display hazards, driving directions and reminders.
• The glasses also feature a button drivers can use to call emergency services.