US Manufacturing Slump Deepens with Ninth Month of Contraction
The ISM Manufacturing PMI fell to 48.2% in November, signaling persistent weakness in the industrial sector and raising concerns over broader economic health.
The U.S. manufacturing sector's protracted downturn extended into its ninth consecutive month in November, as factories contended with weakening demand, declining orders, and persistent cost pressures. The Institute for Supply Management (ISM) reported Monday that its manufacturing Purchasing Managers' Index (PMI) registered 48.2%, a decline from the previous month's 48.7% and a clear signal of ongoing contraction.
The latest figures underscore the challenges facing the goods-producing side of the economy, which has struggled to gain footing amid a complex global trade environment and shifting consumer demand. A PMI reading below 50 indicates contraction in the manufacturing sector.
The details of the November 2025 ISM report paint a picture of widespread weakness. The New Orders Index, a key forward-looking indicator, contracted for the third straight month, suggesting that the pipeline for future factory activity remains thin. The Employment Index also continued its downward trend, marking its ninth consecutive month of contraction and pointing to sustained softness in the manufacturing labor market.
Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, noted that companies are still managing outputs to better match softening demand. The report highlighted that tariffs continue to affect sales and hiring decisions for many firms, acting as a persistent drag on growth.
While the industrial sector is struggling, the broader U.S. economy has remained resilient, expanding for 67 consecutive months, according to the ISM. A PMI above 42.3% is generally consistent with an expansion in the overall economy. This divergence highlights a two-speed economy, where a robust services sector continues to offset the deep slump in manufacturing.
Investors reacted to the news with caution. The S&P 500 was down 0.4% in morning trading, while the Dow Jones Industrial Average shed 120 points as markets digested the implications of a weaker industrial base. The prolonged manufacturing downturn could become a more significant headwind for the wider economy if it begins to spill over into consumer spending and business investment outside of the factory sector.
The persistent weakness in manufacturing will be a key data point for the Federal Reserve as it considers its future monetary policy path. While the central bank has held rates steady, a continued industrial slowdown could increase pressure for a more accommodative stance to support economic growth. Economists will now be closely watching for signs of stabilization or further decline in the coming months to gauge the trajectory of the U.S. economy heading into the new year.