U.S. ISM Manufacturing PMI Contracts Again in December; Lowest Since October ’24
Summary
- ISM Mfg. PMI down to 47.9 in Dec., below forecasts; 10th straight month of contraction.
- Production (51.0) expands for the third time in four months.
- New orders (47.7) contract for the fourth successive month.
- Employment (44.9) contracts for the 11th consecutive month.
- Prices Index (unchanged at 58.5) indicates prices rise for the 15th straight month; exports & imports continue to contract.
The ISM U.S. manufacturing PMI fell to 47.9 in December, the third consecutive m/m fall, from 48.2 in November and 48.7 in October, according to the Institute for Supply Management. The December reading, below the 50 expansion-contraction dividing line, indicated that the U.S. manufacturing sector contracted for the 10th consecutive month and reached its lowest level since October 2024. A reading of 48.4 for December had been expected in the Action Economics Forecast Survey. The December manufacturing PMI, while slightly above a low of 46.9 in October 2024, was below its recent high of 50.9 in January 2025, 49.2 in December 2024, and a peak of 63.8 in March 2021.
The production index eased to 51.0 in December after rising to 51.4 in November, suggesting production expanded for the third time in four months. The index was well above its recent low of 44.0 in April 2025 but below a high of 53.7 in March 2024. A lessened 19.0% (NSA) of respondents reported higher production in December while an increased 25.9% reported lower production.
The new orders index rebounded to 47.7 in December from 47.4 in November, indicating new orders contracted for the fourth straight month. The index, while below its recent high of 55.1 in January 2025, remained above a low of 42.7 in January 2023. In December, 18.2% (NSA) of respondents reported higher new orders while an increased 31.5% reported declines. The inventories index fell to 45.2 in December after rising to 48.9 in November, marking the eighth consecutive month of contraction and the lowest level since October 2024. The index was down from its recent high of 53.4 in March 2025 and a high of 56.5 in July 2022. Meanwhile, the supplier deliveries index increased to 50.8 in December from 49.3 in November, indicating slower delivery performance after faster deliveries in November and three prior months in slower territory. In December, 10.4% (NSA) of respondents reported slower delivery speeds while 8.8% reported faster speeds.
On the labor front, the employment index increased to 44.9 in December after falling to 44.0 in November, indicating employment contracted for the 11th straight month but at a slightly slower pace.. The index was up from its recent low of 43.4 in July 2025 but below its recent high of 50.3 in January 2025 and a high of 56.5 in March 2022. Nine percent (NSA) of respondents reported higher employment in December while 21.1% reported less hiring.
On the pricing front, the prices paid index held steady at 58.5 (NSA) in December, indicating raw materials prices rose for the 15th consecutive month. The index remained well above a low of 39.4 in December 2022 but significantly below a high of 87.1 in March 2022 and a peak of 92.1 in June 2021. In December, 26.4% (NSA) of respondents reported higher prices while 9.5% reported price declines.
In other ISM series not included in the composite index, the new export orders index edged up to 46.8 in December after rising to 46.2 in November, indicating new export orders contracted for the 10th straight month. It was up from its recent low of 40.1 in May 2025 but down from its recent high of 52.4 in January 2025 and a high of 57.1 in February 2022. The imports index fell to 44.6 in December after rising to 48.9 in November, remaining at a contraction level for the ninth consecutive month and at the lowest level since May 2025; it was down from its recent high of 52.6 in February 2025 and a high of 55.4 in February 2022. The order backlog index increased to 45.8 (NSA) in December after declining to 44.0 in November, indicating falling backlog levels since October 2022. It was up from a low of 37.5 in May 2023 but far below a peak of 70.6 in May 2021.
The ISM figures are based on responses from over 400 purchasing and supply executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These data are diffusion indexes where a reading above 50 indicates expansion; below 50 indicates contraction. The ISM Manufacturing PMI is a composite index based on the diffusion indexes of five of the indexes (seasonally adjusted) with equal weights: New Orders, Production, Employment, Supplier Deliveries, and Inventories. The figures from the Institute for Supply Management can be found in Haver’s USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver’s AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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