Manufacturing Slips Again Despite Demand Uptick: ISM

U.S. manufacturing contracted faster in October, with the ISM Purchasing Managers’ Index falling to 48.7%, down 0.4 points from September — signaling continued strain from tariff uncertainty.

While all four demand indicators — new orders, exports, backlogs, and inventories — improved slightly, each stayed below 50%, marking ongoing contraction. ISM Chair Susan Spence said “tariffs and cost pressures” remain top concerns, with negative comments outnumbering positives six to one.

Production and hiring both weakened, and inventories shrank at a faster pace, though prices rose for the 13th straight month. Of the six largest manufacturing sectors, only food & beverage and transportation equipment expanded.

Spence called the recent U.S.-China trade truce a “great start,” but said meaningful recovery hinges on consistent gains in new orders and exports.