US factory activity experienced its most significant contraction in four months during November, as weakening orders indicate ongoing challenges for manufacturers. The Institute for Supply Management’s manufacturing index fell 0.5 points to 48.2, according to recent data. This marks the ninth consecutive month that the index has remained below 50, signalling continued contraction in the manufacturing sector.
The survey data suggests that the nation’s manufacturing base is being weighed down by uncertainty surrounding trade policies and elevated production costs. The ISM index of prices paid for materials increased for the first time in five months. Customer demand has also been uninspiring, with orders contracting at the fastest pace since July and backlogs shrinking at the quickest rate in seven months.
Susan Spence, chair of the ISM Manufacturing Business Survey Committee, attributed the pullback to uncertainty about tariffs, noting that customers are delaying orders pending greater clarity on goods costs. “We do not see anything on the horizon that’s going to turn the ship until there is more certainty,” Spence stated.
The subdued demand conditions are reflected in a steeper contraction in factory employment last month. Approximately 25 per cent of respondents reported lower employment figures, the largest proportion since mid-2020, reinforcing the challenges faced by the US manufacturing industry.
