The U.S. manufacturing sector experienced another month of contraction in November 2025, marking its ninth consecutive month of decline, according to the latest report from the Institute for Supply Management (ISM). The Manufacturing Purchasing Managers’ Index (PMI) fell to 48.2, well below the 50-point threshold that indicates expansion, continuing a worrying trend for the industry. This persistent downturn in manufacturing reflects ongoing struggles for many companies across various sectors.
Industry executives have pointed to several key factors behind the contraction. The most significant among these are the continuing pressures from tariffs, rising input costs, and sluggish demand for new orders. These issues have created a difficult operating environment, particularly for sectors like transportation equipment and wood products, which have seen steep declines in activity. The burden of elevated costs and reduced demand has prompted many companies to reconsider their production strategies, with some shifting more production overseas to mitigate the effects of tariffs and high domestic costs.
Moreover, the challenges facing the manufacturing sector are also being felt in the labor market. Manufacturing firms have continued to reduce or freeze hiring, leading to the 10th consecutive month of employment contraction in the sector. The persistent slowdown in job growth within manufacturing is adding to broader concerns about the health of the economy, as the sector has long been a key indicator of economic vitality. The reduction in workforce levels reflects businesses’ cautious approach to expanding capacity in such an uncertain environment, with many choosing to limit investments rather than taking on the risk of hiring new staff or increasing production.
Despite these widespread challenges, there are still some pockets of growth within the sector. Four manufacturing sub-sectors reported expansions in November, though these gains were relatively modest compared to the broader slowdown. The overall picture remains one of broad-based contraction, with most industries continuing to struggle under the weight of high costs and reduced demand. The sector’s leaders have repeatedly highlighted the uncertainty surrounding trade policy and import costs as significant barriers to business planning and investment, making it difficult for many companies to confidently forecast the future.
The prolonged contraction in manufacturing has significant implications for the broader economy. Analysts have suggested that if the slump continues, it could weigh on overall economic growth, particularly if supply-chain issues persist and businesses remain hesitant to invest in capital or increase their workforces. This ongoing uncertainty poses challenges for policymakers, who must balance the need to address the manufacturing downturn with other economic considerations. For regulators, decisions regarding interest rates and trade policy will be critical in shaping the future direction of the economy.
As the situation evolves, the manufacturing sector’s struggles will likely continue to complicate economic planning, especially if the factors driving the contraction—tariffs, input costs, and sluggish demand—remain unresolved. The prolonged downturn raises questions about how long these pressures can be sustained and whether additional measures are needed to support the sector in the months ahead.