Manufacturing Grit Tested as U.S. Factories Shrink for Ninth Straight Month

01 December 2025

The engines of American industry sputtered again in November 2025, as the latest data revealed a ninth consecutive month of contraction in the manufacturing sector. According to the Institute for Supply Management (ISM), its key index for factory activity, the Purchasing Managers’ Index (PMI) slid to 48.2 from October’s 48.7. That drop offers a stark reminder that the headwinds facing U.S. factories remain both deep and persistent.

A PMI reading below 50 signals contraction. It implies that factories are seeing shrinking orders, fewer new projects, and an uncertain outlook. For context, manufacturing still accounts for more than one-tenth of the U.S. economy meaning this extended decline touches millions of workers and ripples across supply chains.

Underlying the slump is a troubling combination: demand continues to fade while input costs remain stubbornly high. The ISM survey noted new orders, a leading indicator of future activity dropping to 47.4 from October’s 49.4. This marks nine contractions in the last ten months, a worrying trend suggesting many factory orders simply aren’t getting placed anymore.

At the same time, input costs rose, with the survey’s “prices paid” measure creeping up to 58.5 from 58.0. For manufacturers already struggling with fewer orders, paying more for raw materials and components only adds to stress on margins.

One side effect: companies appear to be pulling back on hiring or letting go. The ISM found factory employment fell for a tenth month in a row, reflecting companies’ growing concerns about near-term demand and overall economic uncertainty.

Observers say that one major factor behind the slump remains the drag from ongoing import tariffs and trade policy uncertainty. Since the government’s sweeping import duties came into force, many manufacturers say their cost structure and supply chains have been under increasing strain.

This strain extends beyond raw material prices. Tariff-driven uncertainty seems to have discouraged new investment and delayed orders not just domestically but from international buyers as well. Exports showed only modest improvement even as global demand faltered.

Interestingly, the ISM report notes that a certain level of manufacturing contraction with PMI hovering between roughly 42.3 and 50 has historically been consistent with overall economic growth. That may indicate that the broader economy has enough sectors still chugging along to offset manufacturing’s weakness, at least temporarily.

Still, policymakers and business leaders seem wary. Some hope for relief from potential changes in trade policy. Others argue that deeper structural issues such as labor shortages, long-term investment declines, and shifting global supply chains, mean a return to robust manufacturing growth may be difficult without broader economic adjustments.

For factory workers, the slump has already meant layoffs, reduced hours, and uncertainty. For cities and regions historically dependent on manufacturing, the drop in orders and hiring threatens to ripple through local economies. For suppliers, distributors, and even consumers especially those buying durable goods, the slowdown portends narrowing choices, rising prices, and longer wait times.

On the flip side, some corners of industry especially those tied to emerging sectors such as artificial intelligence hardware are showing scattered signs of resilience. These pockets suggest that while traditional manufacturing clings on, growth may increasingly come from specialized, high-tech segments rather than mass commodity production.

Yet for now, the overall mood remains cautious. Until demand picks up, tariffs are eased, or cost pressures subside, many factories may continue to operate under the shadow of shrinking orders and rising input expenses.

The November data offers more than a snapshot, it captures a critical moment for U.S. manufacturing. With nine successive months of contraction, the industry stands at a crossroads. Whether it finds a path forward will depend on policy decisions, global economic trends, and the ability of businesses to adapt. The coming months may well determine whether the slump becomes a prolonged downturn or the beginning of a painful but necessary transformation.