Manufacturing activity contracted again in December, marking the 10th consecutive month of decline, according to the latest Manufacturing Report on Business from the Institute for Supply Management (ISM).
What’s Related
The PMI came in at 47.9, down 0.3 points from November. Any reading below 50 signals contraction. December’s PMI was also below the 12-month average of 48.9 and marked the lowest reading of 2025.
Only two manufacturing sectors reported growth in December: Electrical Equipment, Appliances, & Components, and Computer & Electronic Products. Most other sectors remained in contraction, including Transportation Equipment, Machinery, Chemicals, Food and Beverage, and Primary Metals.
Key ISM metrics for December included:
New Orders at 47.7, up 0.3 points, contracting for the fourth consecutive month
Production at 51.0, down 0.4 points, growing for the second straight month
Employment at 44.9, up 0.9 points, contracting for the 11th consecutive month
Supplier Deliveries at 50.8, up 1.5 points, indicating slower deliveries
Inventories at 45.2, down 3.7 points, contracting for the eighth consecutive month
Customers’ Inventories at 43.3, down 1.4 points, are considered too low
Prices at 58.5, flat from November, increasing for the 15th consecutive month
Tariffs and broader economic conditions once again stood out in panelist comments.
“Winding up the year with mixed results,” said a Chemical Products panelist. “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.”
In an interview with Logistics Management, Susan Spence, Chair of ISM’s Manufacturing Business Survey Committee, said December capped a year of broad-based manufacturing weakness.
“A major concern in this report is that 85% of the manufacturing sector was in contraction in December, up from 58% in November, with the percentage of manufacturing GDP in strong contraction up to 43%,” Spence said. “Overall, the sentiment is not great, nor is the employment picture.”
Visit Logistics Management for more coverage of December’s manufacturing report.
