ISM Manufacturing Expanded in September for the Ninth Consecutive Month

Input prices up 24 months, increasing faster.

Please consider the September 2026 ISM^® Manufacturing PMI^® Report

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 54.5 percent in September, 0.1 percentage point below the August figure of 54.6 percent. The overall economy continued in expansion for the 23rd month in a row. (A Manufacturing PMI® above 47.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index expanded for the ninth consecutive month after four straight readings in contraction, registering 55.3 percent, up 1.6 percentage points compared to August’s figure of 53.7 percent. The September reading of the Production Index (56.7 percent) is 1.6 percentage points lower than the 58.3 percent recorded in August. The Prices Index remained in expansion (or ‘increasing’ territory), registering 77.9 percent, a notable increase of 6.8 percentage points compared to August’s reading of 71.1 percent. The Backlog of Orders Index registered 56.4 percent, up 4.6 percentage points compared to the 51.8 percent recorded in August. The Employment Index reading of 52.7 percent is up 1.5 percentage points from August’s figure of 51.2 percent,” says Spence.

 “In September, U.S. manufacturing activity remained in expansion territory. Of the five subindexes that make up the PMI^®, only New Orders and Employment grew faster than the previous month. In September, 40 percent of the comments were positive and 60 percent negative, with a 1-to-1.6 ratio of positive to negative sentiment. Among negative comments, pricing volatility was mentioned in 46 percent, tariffs 34 percent, the Iran war 30 percent and increasing lead times 21 percent; most comments mentioned multiple factors.

Key ISM Points

• New Orders Growing
• Production Growing
• Employment Growing
• Prices Increasing
• Imports Growing
• Exports Growing

Respondent Comments (Emphasis Mine)

• “Better performance was driven primarily by temporary market effects, including (1) geopolitical uncertainties, (2) customers bringing forward purchases, (3) delayed raw material price increases and (4) reduced competitor capacity. However, these factors do not signal sustained recovery: Structural challenges facing the chemical industry remain, including overcapacity, persistent pricing pressures and protectionist trade policies.” [Chemical Products]
• “Supply chain performance has improved compared to prior years, with lead times largely normalized. Cost pressures persist in select raw materials, transportation and labor categories, requiring continued focus on supplier management and cost control. We remain cautiously optimistic about business conditions over the next several quarters.” [Chemical Products]
• “The U.S. tariff schedule is providing challenges. Finding alternate sources of supply outside of China, local pushback on data centers in the U.S. and continuing material/component shortages are affecting business.” [Computer & Electronic Products]
• “Manufacturing activity remains stable, with a continued focus on cost optimization, supplier negotiations and supply base consolidation. We are actively evaluating alternative sources in several categories to improve supply resilience and reduce costs. While material availability has generally improved compared to prior periods, qualification requirements and supplier capacity constraints continue to influence sourcing decisions for certain critical materials and components. Capital and operational spending remain focused on productivity, efficiency and transformation initiatives.” [Computer & Electronic Products]
• “Orders have doubled yet again, and delivery times have also doubled, in the semiconductor, electronics and government sectors, with remaining sectors flat to down. Coupled with supply chain lead times and pricing pressures, the factory backlog has nearly doubled. Canada tariffs have impacted cross-border costs and left our supply chain team scrambling — those supply chains took years to develop and nurture — hurting the very lead times government buyers are concerned about.” [Machinery]
• “Order levels remain strong and elevated; we have orders through year-end at above forecast levels. Our biggest challenge continues to be a severe shortage of workers, limiting our production output to meet demand. The second challenge is general availability of steel; the market is getting worse, and more production delays are expected as we gap out of needed material.” [Fabricated Metal Products]
• “Raw metals continue to be challenging, especially with the uncertain nature of tariffs being on and off again. New tariffs against Canada have drastically increased costs for capital expenses as well as assemblies.” [Electrical Equipment, Appliances & Components]
• “Fuel costs are still affecting transportation costs and the overall cost of goods. Beef costs remain high, with no relief in sight.” [Food, Beverage & Tobacco Products]
• “Higher interest rates slow down the growth of new construction projects; we also have to face up to the higher cost of components from overseas due to tariffs and freight rates. Due to booming demand of AI and data centers, domestic steel capacity has been stretched and pushed. Higher steel costs each month increase our raw-material and finished-goods costs.” [Machinery]
• “Every month, we are faced with new headwinds created by this administration. This month, it is the trade war with Canada, which every day is getting worse — causing prices to go up and uncertainty that creates massive disruption. Buying continues to get pushed out indefinitely as customers don’t want to spend on capital expenditures until there is more certainty of costs and demand. The only thing that is predictable is the chaos that is created by these trade policies.” [Transportation Equipment]

That’s a mixed bag of comments with a lot of complaints about tariffs and pricing.

Commodities Up/Down in Price or in Short Supply

The numbers in parenthesis below are the number of months.

Commodities Up in Price

Aluminum (34); Brass Products; Copper (15); Copper Products (2); Corrugated Products (6); Diesel Fuel (2); Electrical Components (4); Electronic Components (9); Freight (7); Fuel (7); Memory Components (7); Nickel; Oil Based Products (6); Packaging Materials; Plastic Based Products (6); Printed Circuit Boards (3); Resins (8); Semiconductors (4); Soybean Meal; Steel (11); Steel — Hot Rolled (9); Steel — Stainless (8); Steel Products (10); and Zinc.

Commodities Down in Price

None

Commodities in Short Supply

Aluminum Products; Copper (3); Dynamic Random Access Memory (DRAM); Electrical Components (15); Electronic Components (19); Memory (9); Printed Circuit Boards (3); Steel (3); Steel — Hot Rolled; Steel Products; and Tungsten Products (3).

ISM Reported Input Prices

Prices Paid

• Higher: 58.6 percent
• Lower: 2.8 percent
• Net: 55.8 percent
• Up 24 Consecutive Momths

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