U.S. Manufacturing PMI Contracts Again, But Hints of a Rebound Lie Ahead
By James Hyerczyk | Updated: November 3, 2025, 16:56 GMT
The U.S. manufacturing sector faces hard times as the ISM Manufacturing Purchasing Managers’ Index (PMI) for October shows contraction for the eighth month in a row. Recent numbers also show sparks of firming and a possible lift in activity that market watchers need to follow.
October Manufacturing PMI Shows Ongoing Shrinkage
The Institute for Supply Management (ISM) reports that the manufacturing PMI dropped to 48.7 in October. It slipped a bit from 49.1 in September. A score lower than 50 tells us that the sector has shrunk again, though only a little.
While the main number shows continued trouble, nearby details in the report give a richer view. Some market experts ask if the manufacturing field is in a long dip or if it is in a pause before a rise.
New Orders Show Slow Change in Demand Decline
New Orders, a key sign of upcoming factory work, nudged up to 49.4 from nearly the same score last month. Even though this number still sits in the shrinking zone, it marks two months in a row with a small change.
Export orders rose a bit, moving from 43.0 to 44.5. These numbers show that while challenges like trade frictions and low global demand stay firm, their force might be easing now.
Since the numbers in New Orders and Exports improve slowly, experts warn that the sector has not yet turned completely around, but the worst drop in demand seems to be behind it.
Production and Inventory Numbers Give a Mixed Story
The production score slipped to 48.2 in October, a drop of 2.8 points since September. This turn shows factories still face hard work.
Yet, the data on inventories holds a small hope. The Inventories Index went down to 45.8, and Customers’ Inventories stayed very low at 43.9. This mix tells us that companies take from their stocks instead of building them up. This may help spark more work if demand grows soon. Analysts now wait to see if shops will pick up supplies quickly and boost factory work.
Employment Stays Weak but Shows a Small Lift
The job index for manufacturing dropped to 46.0 in October. This number marks the ninth month in a row of fewer factory jobs. Reports show that for every new hire, there were about 3.4 job losses. This warns us that factories remain wary of increasing their staff even as orders start to ease.
Prices Grow More Slow, But Material Costs Remain High
The Prices Index lessened to 58.0 from 61.9 in September. This change points to some relief in cost strain. Yet, prices stay high mainly because aluminum, stainless steel, and trade-related costs push them up. These factors continue to pinch the profit margin even as price pressure goes down a bit.
What Does This Mean for the Market?
Orders still sit in a better range, having gone up from 46.2 to 47.9, which means the order list holds up. Supplier delivery numbers moved to 54.2, showing that suppliers now work with caution amid shifting demand.
These facts, along with low inventories, hint at a chance for more work if demand does grow. A boost in production or new orders next month could quickly change the market view to a more hopeful one.
Short-Term Outlook: Cautiously Hopeful
Even though the main manufacturing PMI number shows hard times, the inner numbers hint that the decline may be close to its lowest point. The small rise in New Orders, steadier backlogs, and low stock levels tell us that the sector might soon see a jump in activity.
Market watchers and traders are told to stay alert and keep a close eye on signs of restocking and steadier orders in the next few months. A quick change in production or New Orders could bring a fast shift toward a better market view.
About the Author
James Hyerczyk is a seasoned U.S.-based technical analyst and market educator. With four decades of experience in reading charts and tracking price moves, he has written two books on technical analysis and knows the futures and stock markets well.
This article serves as an information and learning tool. It does not give specific investment advice. Readers should do their own research and seek a financial advisor’s help before making any investment moves.
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