U.S. manufacturing activity contracted for the ninth consecutive month in November 2025, according to the latest survey from the Institute for Supply Management (ISM). The Manufacturing Purchasing Managers’ Index (PMI) dropped to 48.2, well below the 50 threshold that typically indicates economic expansion. This marks another troubling signal for the sector, as factories continue to grapple with weak order volumes, rising input costs, and the ongoing uncertainty surrounding trade policies.
The report highlights that several key segments, including transportation equipment, wood products, and textile mills, reported declines in both output and employment. Manufacturers specifically pointed to recent tariffs on medium- and heavy-duty trucks and auto parts as a significant factor driving costs upward. These tariffs have added pressure to an already strained manufacturing environment, where rising costs are further discouraging production. As companies struggle with higher expenses and weak demand, many are finding it increasingly difficult to remain profitable.
While the broader trend is one of contraction, there are pockets of growth within specific industries. Notably, computer and electronic products as well as machinery manufacturing showed signs of modest expansion. These sectors, which are often tied to technology and automation, have been less affected by the tariff pressures that are weighing down other manufacturing areas. This suggests that while the broader manufacturing landscape is struggling, demand for high-tech products and advanced machinery continues to hold steady, driven in part by global shifts toward increased automation and technological innovation.
Despite these bright spots, the overall outlook for U.S. manufacturing remains concerning. The ongoing slump in factory activity is contributing to broader signs that the U.S. economy may be losing momentum, even as certain sectors, such as high-tech and renewable energy, continue to expand. The persistence of weak orders, along with rising costs, is dampening the growth prospects for many manufacturers, particularly in states that are heavily reliant on industrial output.
Analysts are increasingly worried that unless trade tensions ease and cost pressures abate, the contraction in manufacturing could deepen further. This could lead to additional job reductions and a slowdown in investment across regions where manufacturing is a key economic driver. Given that the manufacturing sector plays such an integral role in the broader U.S. economy, a continued downturn could have wider implications, potentially leading to weaker economic growth overall.
As the challenges facing U.S. manufacturers mount, it remains to be seen whether there will be significant relief in the form of policy changes or improvements in global trade conditions. For now, the outlook is one of uncertainty, with manufacturers under pressure from rising costs, trade tariffs, and a lack of sufficient demand to drive recovery in the sector.
