Manufacturing Remains in Contraction for 10th Straight Month
Summary
Article Date: 2026-01-06T06:40:00-05:00
Article URL: https://www.supplychain247.com/article/ism-manufacturing-pmi-december-contraction
Article Image: https://www.supplychain247.com/images/2025_article/manufacturing-jobs-pixabay55.jpg
Content summary
ISM’s December Manufacturing Report on Business shows the sector remained in contraction for the 10th consecutive month. The headline PMI fell to 47.9, the weakest reading of 2025 and below the 12‑month average. Weak demand, tariffs and lower investment were named by panelists as central headwinds. Only two sectors — Electrical Equipment, Appliances & Components and Computer & Electronic Products — reported growth in December; most others, including Transportation Equipment, Machinery and Chemicals, were in decline.
Key Points
- Headline PMI: 47.9 (down 0.3 points from November) — below 50 signals contraction and the lowest 2025 reading.
- New Orders: 47.7 (up 0.3 points) — contracting for the fourth straight month.
- Production: 51.0 (down 0.4 points) — in modest growth for the second straight month.
- Employment: 44.9 (up 0.9 points) — contracting for the 11th consecutive month.
- Supplier Deliveries: 50.8 (up 1.5 points) — indicates slower deliveries.
- Inventories: 45.2 (down 3.7 points) — contracting for the eighth consecutive month.
- Customers’ Inventories: 43.3 — considered too low, which can imply future reorder potential if demand improves.
- Prices: 58.5 — flat month‑to‑month but rising for the 15th consecutive month.
- Sector breadth: ISM Chair Susan Spence noted ~85% of the manufacturing sector was in contraction in December, with 43% of manufacturing GDP in strong contraction.
- Panelist comments point to tariffs, weak consumer spending and reduced investment as ongoing pressures.
Context and Relevance
The report signals persistent weakness across much of US manufacturing as of December 2025. Elevated prices alongside falling new orders and employment suggest stagflationary pressure for some industries and continued strain on supply‑chain planning, procurement and workforce strategies. For supply‑chain professionals, procurement teams and manufacturing leaders, the mix of low inventories, slow new orders and sustained price increases is a key planning input for sourcing, production pacing and cost management through early 2026.
Why should I read this?
Quick and dirty: if you work with production, procurement or transport, this is your pulse check. The PMI shows the sector is still under the cosh — tariffs, soft demand and weak hiring are causing headaches. Read this to know whether you need to tighten forecasts, rethink inventory buys or brace for continued volume softness.
Source
Source: https://www.supplychain247.com/article/ism-manufacturing-pmi-december-contraction