U.S. manufacturing shrank for the ninth consecutive month in November, as factories continued to struggle with weaker demand, falling orders, and rising input costs. Import tariffs also remained a persistent drag on the sector.
Data from the Institute for Supply Management (ISM) showed that its manufacturing PMI slipped to 48.2 in November from 48.7 in October. Any reading below 50 signals contraction. Manufacturing currently accounts for just over 10% of the U.S. economy.
Despite the decline, the PMI remained above the 42.3 threshold that the ISM associates with long-term growth in the broader economy. Economists surveyed by Reuters had expected the index to rise to 49.0.
The Federal Reserve’s Beige Book report last week noted that consumer spending weakened further through mid-November. It also pointed out that a few of the Fed’s 12 districts saw modest improvements in manufacturing, but emphasized that tariffs and uncertainty surrounding trade policy continued to weigh on activity. President Donald Trump’s broad tariff program has pressured factories, although some areas have been supported by increased investment in artificial intelligence.
Last month, U.S. Supreme Court justices questioned the legality of Trump’s tariffs, raising speculation that they could be overturned. Analysts warned that such a ruling could spark additional instability, especially if Trump shifts toward alternative trade measures.
Trump has argued that tariffs are essential to protect U.S. manufacturing, though many economists say structural challenges—such as persistent labor shortages—make it difficult to restore the sector’s former strength.
The ISM’s forward-looking new orders index fell to 47.4 from 49.4 in October, marking contraction in nine of the past ten months. Higher prices caused by tariffs reduced demand, and unfilled orders continued to decline. Export activity improved slightly.
Weaker demand also eased pressure on supply chains. The ISM supplier deliveries index dropped to 49.3 from 54.2, indicating faster delivery times.
Even with soft demand, manufacturers faced rising input costs. The ISM prices-paid index ticked up to 58.5 from 58.0, suggesting inflationary pressures may persist.
Employment in the factory sector also declined. The ISM employment index contracted for the tenth straight month, reflecting ongoing staff reductions as companies adapt to uncertain near- and medium-term demand.
