Source: Manufacturing Dive
Date: 1st October 2025

September PMI shows ongoing contraction as export orders decline and supply chains face delays.

The U.S. manufacturing sector continued to contract in September, according to the latest Purchasing Managers’ Index from the Institute for Supply Management. The index registered 49.1%, remaining below the 50% growth threshold despite a slight improvement from August. New orders and export orders both weakened, with the latter falling sharply as tariff pressures continued to weigh on trade. While backlog orders saw a modest uptick, overall demand indicators remain weak, highlighting the fragility of manufacturing momentum.

Production rose slightly in September, attributed to earlier order increases, while supplier deliveries also reflected faster turnaround compared with August. Employment, however, continued to lag, with more reports of layoffs and hiring freezes across manufacturers. Only petroleum and coal products showed growth among the six largest manufacturing industries, while most sectors reported contraction or stagnation.

The broader picture suggests an industry facing multiple headwinds, tariffs, rising costs, and weak demand, compounded by the federal government shutdown.

Manufacturers have stockpiled goods to pre-empt tariffs, creating potential downside risks for future production. Meanwhile, private sector data from S&P Global indicated a slower pace of expansion, with companies citing ongoing supply chain disruptions and tariff-driven vendor delays that could further limit output and increase costs if prolonged.

For shippers and global exporters, these developments signal greater uncertainty in logistics planning. Falling new export orders reduce cross-border freight volumes, while stockpiling ahead of tariff deadlines creates temporary spikes that disrupt capacity balance. Shippers may face higher freight rates as carriers adjust to irregular demand flows, and exporters risk slower turnaround times due to vendor delays and customs checks. This volatility underscores the need for flexible routing, diversified markets, and closer coordination with logistics partners to maintain supply chain resilience amid shifting trade policies.