U.S. Manufacturing Contracts for Eighth Straight Month as ISM PMI Falls to 48.7 — Evening Brief – 11.03.25
U.S. manufacturing activity deteriorated further in October, with the ISM Manufacturing PMI declining to 48.7, down from 49.1 in September and missing the 49.5 consensus estimate, according to data released Monday by the Institute for Supply Management. The reading marks the eighth consecutive month of contraction in the manufacturing sector, as any level below 50 indicates shrinking economic activity.
Susan Spence, Chair of the ISM Manufacturing Business Survey Committee, noted that “U.S. manufacturing activity contracted at a faster rate, with contractions in production and inventories leading to the 0.4-percentage-point decrease of the Manufacturing PMI,” adding that a modest chain reaction of one-month improvements that began in August with New Orders and continued with Production in September stalled in October.
Beneath the headline data, key components highlighted mounting strains in the sector. New Orders inched up to 49.4 from 48.9 in September, remaining in contraction territory but showing slight improvement. Production fell sharply to 48.2 from 51.0, reversing last month’s expansion, while manufacturing employment ticked up to 46.0 from 45.3, signaling continued—but somewhat moderated—job contraction. Notably, input price pressures softened, with the Prices Index falling to 58.0 from 61.9, well below the 62.4 consensus, suggesting easing cost burdens for manufacturers.
Industry-level performance remained uneven. Only six of 18 industries reported growth in October, led by Primary Metals and Food, Beverage & Tobacco Products. Meanwhile, 12 industries continued to contract, with the steepest declines in Textile Mills; Apparel, Leather & Allied Products; and Furniture & Related Products—categories closely tied to consumer discretionary demand.
“Looking at the manufacturing economy, 58% of the sector’s gross domestic product contracted in October, down from 67% in September, however; the percent of GDP in strong contraction (registering a composite PMI of 45% or lower), is at 41%, up 13% from September. The share of sector GDP with a PMI at or below 45% is a good metric to gauge overall manufacturing weakness,” added Spence.
The report reinforces that the manufacturing sector remains under pressure from soft demand, inventory corrections, and tighter financial conditions, raising questions about the timing and durability of an eventual rebound.