U.S. ISM Manufacturing PMI Slips in February, Still Indicating Expansion

The ISM U.S. manufacturing PMI dipped to 52.4 in February, the fourth m/m decline in five months, after a 4.7-point rebound to 52.6 in January, data from the Institute for Supply Management showed. The February reading, above the 50 expansion-contraction dividing line, indicated the U.S. manufacturing sector expanded for the second successive month and only the third in 40 months. A reading of 51.8 for February had been expected in the Action Economics Forecast Survey. The February manufacturing PMI, while above 50.0 in February 2025 and a low of 47.0 in October 2024, remained below a peak of 63.8 in March 2021.

The production index fell to 53.5 in February from 55.9 in January (the highest level since February 2022), indicating production expanded for the fourth consecutive month but at a slower pace. The index was above its recent low of 44.8 in April 2025 but below a peak of 66.5 in March 2021. In February, 25.2% (NSA) of respondents reported higher production while 16.0% reported lower production. The new orders index declined to 55.8 in February from 57.1 in January (also the highest level since February 2022), signaling new orders expanded for the second straight month following four successive months of contraction. The index remained well above a low of 41.8 in January 2023. In February, 30.3% (NSA) of respondents reported higher new orders while a reduced 12.8% reported declines. The inventories index increased to 48.8 in February from 47.6 in January, marking the 10th straight month of contraction. The index was below its recent high of 52.7 in March 2025 but above a low of 43.8 in October 2024. Meanwhile, the supplier deliveries index rose to 55.1 in February from 54.4 in January, indicating slower delivery performance for the third consecutive month after faster deliveries in November. In February, 14.0% (NSA) of respondents reported slower delivery speeds while 3.8% reported faster speeds.

On the labor front, the employment index increased to 48.8 in February from 48.1 in January, showing that employment contracted for the 29th straight month after a brief expansion in September 2023; however, February’s contraction was the slowest since January 2025. The index was above its recent low of 44.1 in November 2025 but below its recent high of 49.7 in January 2025 and a high of 56.5 in March 2022. In February, 18.8% (NSA) of respondents reported higher employment while 20.4% reported less hiring.

On the pricing front, the prices paid index jumped to 70.5 (NSA) in February from 59.0 in January, indicating raw materials prices rose for the 17th consecutive month and at the fastest pace since June 2022. 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. An increased 45.4% (NSA) of respondents reported higher prices in February while only 4.4% reported price declines.

In other ISM series not included in the composite index, the new export orders index edged up to 50.3 in February from 50.2 in January, indicating new export orders expanded for the second successive month following 10 months of contraction. The index was up from a 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 rose to 54.9 in February from 50.0 in January, suggesting imports expanded the first time since March 2025 and reached the highest level since February 2022. The index was above a low of 39.9 in May 2025. The order backlog index advanced to 56.6 (NSA) in February from 51.6 in January, showing that backlog levels expanded for the second straight month and hit the highest level since May 2022. The index was well above 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.