December 2025 Manufacturing PMI® Falls to 47.9%, ISM® Report Reveals
The manufacturing sector in the U.S. exhibited notable contraction in December 2025, marking the tenth consecutive month of decline. According to the Institute for Supply Management’s (ISM) Manufacturing PMI Report, the Manufacturing PMI registered at 47.9%, reflecting a 0.3 percentage point reduction from November’s 48.2%. This is also the lowest recorded PMI for 2025.
Key Highlights from the December 2025 Manufacturing PMI Report
- Ten Months of Contraction: The manufacturing sector has contracted for a full ten months, following a brief two-month expansion.
- Overall Economic Growth: Despite contractions in manufacturing, the overall economy has expanded for 68 months since April 2020, with indications of GDP growth correlating closely with the manufacturing PMI results.
- New Orders Index: The New Orders Index fell to 47.7%, signaling slower demand, although this was a slight improvement from November’s 47.4%.
- Production Index: Stood at 51%, suggesting continued growth, albeit at a slower pace compared to the previous month.
- Employment Index: A decrease to 44.9% indicates ongoing job cuts within the sector, with discussions of head count management becoming more prevalent.
- Raw Materials Prices: The Prices Index remained unchanged at 58.5%, indicating continued inflation within raw materials.
- Export and Import Trends: The New Export Orders Index and Imports Index saw contractions, registered at 46.8% and 44.6%, respectively.
Contrasting Indexes and Industry Performance
The fluctuation of several indexes provided varying insights into the manufacturing climate. Notably, the Backlog of Orders Index rose to 45.8%, while the Inventories Index decreased significantly, registering at 45.2%. Most major manufacturing sectors remained in contraction, with only the Computer & Electronic Products industry showing growth.
| Index | December 2025 | November 2025 | Change |
|---|---|---|---|
| Manufacturing PMI | 47.9 | 48.2 | -0.3 |
| New Orders | 47.7 | 47.4 | +0.3 |
| Production | 51.0 | 51.4 | -0.4 |
| Employment | 44.9 | 44.0 | +0.9 |
| Prices | 58.5 | 58.5 | 0.0 |
| New Export Orders | 46.8 | 46.2 | +0.6 |
| Imports | 44.6 | 48.9 | -4.3 |
Future Outlook
With many indexes reflecting contraction, the outlook remains mixed. Positive indicators exist, such as the notably low Customers’ Inventories Index, which suggests potential future production increases. However, sustained improvement is necessary across multiple indices for a recovery in the manufacturing sector.
Overall, December’s manufacturing data points to increased economic uncertainty, driven by factors such as tariffs and fluctuating consumer demand, as companies brace for further challenges in early 2026.
