Lowest reading in 2025. Respondents blame tariffs.
Please consider the December 2025 Manufacturing ISM® Report On Business® .
The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.
“The Manufacturing PMI® registered 47.9 percent in December, a 0.3-percentage point decrease compared to the reading of 48.2 percent in November and the lowest reading of 2025. The overall economy continued in expansion for the 68th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for a fourth straight month in December following one month of growth; the figure of 47.7 percent is 0.3 percentage point higher than the 47.4 percent recorded in November. The December reading of the Production Index (51 percent) is 0.4 percentage point lower than November’s figure of 51.4 percent. The Prices Index remained in expansion (or ‘increasing’ territory), registering 58.5 percent, the same as November’s reading. The Backlog of Orders Index registered 45.8 percent, up 1.8 percentage points compared to the 44 percent recorded in November. The Employment Index registered 44.9 percent, up 0.9 percentage point from November’s figure of 44 percent.
Spence continues, “In December, U.S. manufacturing activity contracted at a faster rate, with pullbacks in the Production and Inventories indexes leading to the 0.3-percentage point decrease of the Manufacturing PMI®. Those two subindexes increased in November, so their contraction this month continues the short-term “bubble” of improvement indicative in the last several months of PMI® data — and a hallmark of recent economic uncertainty in manufacturing.
“Looking at the manufacturing economy, 85 percent of the sector’s gross domestic product (GDP) contracted in December, compared to 58 percent in November, and the percentage of manufacturing GDP in strong contraction (defined as a composite PMI® of 45 percent or lower) increased to 43 percent, compared to 39 percent in November. The share of sector GDP with a PMI® at or below 45 percent is a good metric to gauge overall manufacturing weakness. Of the six largest manufacturing industries, only Computer & Electronic Products expanded in December,” says Spence.
Respondent Comments
- “Winding up the year with mixed results. It has not been a great year. We have had some success holding the line on costs; however, real consumer spending is down and tariffs are ultimately to blame. I hope for some return to free trade, which is what consumers have ‘voted for’ with their spending.” [Chemical Products]
- “Trough conditions continue: depressed business activity, some seasonal but largely impacted by customer issues due to interest rates, tariffs, low oil commodity pricing and limited housing starts.” [Machinery]
- “Things are quieter regarding tariffs, but prices for all products remain higher. Our costs have increased, so we have increased prices for our customers to compensate. Margins have deteriorated, as full pass through (of cost increases) is not possible.” [Computer & Electronic Products]
- “Things are not improving in the transportation equipment market. Many customers are ordering for 2026, but those orders are 20 percent to 30 percent below their historical buying patterns. Some large fleets are still completely on hold for 2026, with zero capital expenditures money available to fleet budgets. Truck rental utilization, which is a good benchmark for the health of the economy, is still below historically stable levels. The general mood of the industry is that the first half of 2026 will be another bust, and we’re now hoping things pick up in the second half, even as the North American truck fleet continues to age.” [Transportation Equipment]
- “In the current environment, our company is struggling with customer orders and financially overall. Our senior leaders are struggling to focus our business and get the company on track with quality products. In November, layoffs impacted about 9 percent of our workforce, affecting all locations in the U.S. and Europe.” [Machinery]
- “Orders continue to drop for most of our businesses. Many plants are not running near full capacity. Make to order being utilized where possible.” [Chemical Products]
- “Order levels have continued to decline: We had a bad October, an awful November and a dismal December. January and February don’t look too good, as bookings are down 25 percent compared to the first two months of 2025.” [Fabricated Metal Products]
- “Morale is very low across manufacturing in general. The cost of living is very high, and component costs are increasing with folks citing tariffs and other price increases. It’s cold in our area of the country, absenteeism is worse around the holidays, and sales were lower than we expected for November. So, things look a bit bleak overall.” [Electrical Equipment, Appliances & Components]
- “Global logistics remains sensitive to geopolitical shifts. Tariffs are influencing equipment pricing and procurement strategies. Large-scale data center programs are absorbing and reducing availability of resources for other sectors.” [Food, Beverage & Tobacco Products]
- “2025 revenue was down 17 percent due to tariffs. The lost revenue has inhibited our ability to offer bonuses to employees or create and hire for new positions.” [Miscellaneous Manufacturing]
Failure to Get the Message
What the heck is the matter with these people? Did they not get the message that this is the greatest economy in the history of the world?
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Manufacturing is shrinking because the Greenland defense forces have so far thrown the American invasion force back into the seas. Once victory over Greenland is ours, manufacturing will flourish as everybody loves a winner.
The move of a local aircraft parts manufacturer to Canada is now almost complete. A total of 17 employees and their families sold their homes and moved to Canada.
Originally, Part of production and 5 of the employees were going to re-locate to the companies second location. Instead they and 2 others from that plant made the move along with some production.
Most interestingly the company just landed a contract with Airbus because they are now more competitive in the global market.
Raw materials, utilities and insurance savings will pay all costs of the move within 18 months.
Fire, ready, aim economics from Trump and his pack of economic illiterates reduces our global access and competitiveness.
You know things suck when you move to Canada to keep your job.
Just wait until they need health care and find out they have to wait 6+ months to get it.
You clearly do not have any experience with the Canadian healthcare system. Care is readily available and many Canadians have returned home for routine care. The US does have far better research hospitals and of course the Mayo Clinic is the top in the world.
As an outcome based system, some Canadian people do not qualify for healthcare procedures that would be done in the US (for the $$$’s). This is because the morbidity is too great or the threat of co-morbidity is too great.
In other words “they refuse fat people total knees” because they do not have a reasonable probability of a good outcome.
Rural American hospitals are closing constantly and care is concentrated in the cities. Try getting permission from a for profit insurance company if it is not easy to code for billing.
I repeat my statement again from previous comments.
Budget deficit and gold (precious metal) price say,
“Tata, Cheerio
See you in next life”.
There must thousands of variables not considered here that matter: rerouting cargo ships the long way around the Horn of Africa due to Houthis? The longest government shutdown in history when .gov is so much of the economy? Inflation wasn’t actually transitory? Debt loads maxed with unaffordable refinancing by both corporate and consumer? Commodities soaring in price? AI economic disruptions proliferating rapidly?
It caused the GDPNOW forecast to drop from an expected 3.0% growth rate to a 2.7% growth rate for the 4th quarter.
Still a solid growth rate The weakness from the government shutdown in the 4th quarter is to be largely unwound the 1st quarter making it stronger.
Once you list all the thousands of variables, we can assiduously address each one in detail.
Manufacturing is about to boom…..in Venezuela!
But the Venezuelan wealth would flow to US.
What wealth, the US is $40 trillion in debt. It is an empire of debt not wealth.
Another excuse for the soon to be taco controlled fed to continue to lower rates and add more fuel to the stock melt up fire. What could possibly go wrong. FOMO.
The Fed seems completely boxed in from a fiat currency devaluation and debt load hell they’ve created all on their own. I doubt the Fed Chairmanship matters going forward; a long overdue collapse is going to happen on someone’s watch; tariffs and Trump will just be a scapegoat to shield the banksters from blame if it happens before Trump leaves office.
Trump IS a failure.
His military aggression and insanely random acts of “regulation by tariff” are slowing investment and delaying manufacturing expansion.
Globally, China and our other competitors have gained market share as the US is not a reliable trading partner.
Farmers have lost global markets permanently.
Travel to the US has fallen dramatically… Even with a falling dollar!
But no, the maga sycophants will blame it on anything but their pedophile in chief.