Source: The Business Times
Date: 3rd November 2025

Manufacturing activity declines for the eighth consecutive month, with slower supplier deliveries and weak demand compounding tariff pressures.

The U.S. manufacturing sector continued to contract in October, marking its eighth straight month of decline. The latest data from the Institute for Supply Management (ISM) showed the manufacturing PMI slipping to 48.7, down from 49.1 in September, remaining below the 50 threshold that separates expansion from contraction. This persistent weakness reflects subdued new orders and longer supplier delivery times, as factories contend with the ongoing impact of tariffs on imported goods.

Despite the contraction, the PMI level still indicates that the broader U.S. economy is not yet in recession, supported by consumer spending and selective business investment in emerging technologies such as artificial intelligence. However, the prolonged government shutdown has hindered access to official economic data, clouding visibility on broader trends. Economists warn that the halt in federal programmes could reduce consumer spending power, especially as aid programmes for low-income households lapse.

Within manufacturing, forward-looking indicators such as new orders and export demand remained weak, while production slowed again after a brief rebound in September. Tariffs continue to weigh heavily on industrial output, increasing supply chain costs and extending delivery times to factories. The ISM’s supplier deliveries index rose to 54.2, signalling slower deliveries, while the prices paid index eased slightly but stayed elevated, reflecting higher input costs.

Employment in the manufacturing sector remains under pressure as firms resort to layoffs and hiring freezes to manage costs. While the administration defends import tariffs as a measure to protect domestic manufacturing, economists argue that deeper structural issues, including labour shortages and global competitiveness, limit the sector’s recovery potential. For shippers, importers, and exporters, these conditions translate into ongoing volatility, longer lead times, and higher logistics costs as supply chains adapt to persistent trade and policy uncertainties.