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Released December 02, 2025 | SUGAR LAND
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Written by Danny Levin, Deputy Editor for Industrial Info Resources (Sugar Land, Texas)
"In November, U.S. manufacturing activity contracted at a faster rate, with pullbacks in supplier deliveries, new orders and employment leading to the 0.5-percentage point decrease of the Manufacturing PMI," said Susan Spence, chair of the ISM Manufacturing Business Survey Committee, in the latest summary of findings for the PMI survey.
"Continuing a recent trend, a previous month's improvement in one index was evident in another gauge. After new orders strengthened in August, production improved in September. An improvement in the Backlog of Orders Index in October transferred to the Production Index, which expanded in November (as backlogs pulled back). However, the New Orders and Employment indexes both dipped 2 percentage points, underscoring the ongoing economic uncertainty."
Meanwhile, the Backlog of Orders Index contracted for another month, dropping 3.9% compared with October, reaching 44%. Spence said this suggests that trade-related and geopolitical factors continue, and not much improvement is expected until those influences diminish.
Although the New Export Orders Index improved in November, she indicated many survey panelists are still reporting softer international orders tied to tariffs and ongoing uncertainty around U.S. economic policy.
Those panelists had much to say about how the economic landscape continues to weigh on their business. One panelist from Transportation Equipment said: "We are starting to institute more permanent changes due to the tariff environment. This includes reduction of staff, new guidance to shareholders, and development of additional offshore manufacturing that would have otherwise been for U.S. export."
Another from Computer & Electronic Products said: "Business continues to be a struggle regarding long-term sourcing decisions based on tariffs and landing costs. External (or international) sourcing remains the lowest-cost solution compared to U.S. production/manufacturing."
Meanwhile, one from Electrical Equipment, Appliances & Components said: "At any given point, trade with our international partners is clouded and difficult. Suppliers are finding more and more errors when attempting to export to the U.S.--before I even have the opportunity to import. Freight organizations are also having difficulties overseas, contending with changing regulations and uncertainty. Conditions are more trying than during the coronavirus pandemic in terms of supply chain uncertainty."
It remains to be seen whether the recent trade agreement between the U.S. and China--with main components being the U.S. pausing some of the reciprocal tariffs and China suspending export controls on rare earths--can turn things around.
About 34% of the spending is attributed to the buildout of data centers.
This includes a major buildout of Amazon's (Seattle, Washington) data center footprint in Mississippi: a new campus in Canton. Construction of Phase I of the data center campus kicked off in September 2024 and is expected to wrap up around the end of the year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can view the related project reports.
Key Takeaways
About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Summary
The Institute for Supply Management's (ISM) latest Purchasing Manager's Index (PMI) survey indicates U.S. manufacturing activity contracted for the ninth straight month, as tariffs and economic uncertainty continue to disrupt the domestic manufacturing sector.The ISM's Purchasing Manager's Index
The ISM's Purchasing Manager's Index (PMI), which tracks 18 manufacturing sectors in the U.S., registered 48.2% in November, marking a faster rate of contraction when compared with October and September's readings of 48.7% and 49.1%, respectively. Any reading under 50% indicates contraction in the manufacturing economy; the PMI has been below 50% every month since October 2022, except for January and February of this year."In November, U.S. manufacturing activity contracted at a faster rate, with pullbacks in supplier deliveries, new orders and employment leading to the 0.5-percentage point decrease of the Manufacturing PMI," said Susan Spence, chair of the ISM Manufacturing Business Survey Committee, in the latest summary of findings for the PMI survey.
"Continuing a recent trend, a previous month's improvement in one index was evident in another gauge. After new orders strengthened in August, production improved in September. An improvement in the Backlog of Orders Index in October transferred to the Production Index, which expanded in November (as backlogs pulled back). However, the New Orders and Employment indexes both dipped 2 percentage points, underscoring the ongoing economic uncertainty."
Tariffs' Effect on U.S. Manufacturing Activity
Spence noted for every comment about new orders, there were 1.2 comments "expressing concern about near-term demand, driven primarily by tariff costs and uncertainty."Meanwhile, the Backlog of Orders Index contracted for another month, dropping 3.9% compared with October, reaching 44%. Spence said this suggests that trade-related and geopolitical factors continue, and not much improvement is expected until those influences diminish.
Although the New Export Orders Index improved in November, she indicated many survey panelists are still reporting softer international orders tied to tariffs and ongoing uncertainty around U.S. economic policy.
Those panelists had much to say about how the economic landscape continues to weigh on their business. One panelist from Transportation Equipment said: "We are starting to institute more permanent changes due to the tariff environment. This includes reduction of staff, new guidance to shareholders, and development of additional offshore manufacturing that would have otherwise been for U.S. export."
Another from Computer & Electronic Products said: "Business continues to be a struggle regarding long-term sourcing decisions based on tariffs and landing costs. External (or international) sourcing remains the lowest-cost solution compared to U.S. production/manufacturing."
Meanwhile, one from Electrical Equipment, Appliances & Components said: "At any given point, trade with our international partners is clouded and difficult. Suppliers are finding more and more errors when attempting to export to the U.S.--before I even have the opportunity to import. Freight organizations are also having difficulties overseas, contending with changing regulations and uncertainty. Conditions are more trying than during the coronavirus pandemic in terms of supply chain uncertainty."
It remains to be seen whether the recent trade agreement between the U.S. and China--with main components being the U.S. pausing some of the reciprocal tariffs and China suspending export controls on rare earths--can turn things around.
U.S. Manufacturing Project Activity Remains Robust
Despite the tariffs and any economic uncertainty, data from Industrial Info's Global Market Intelligence (GMI) Project Database shows about $500 billion worth of Industrial Manufacturing Industry projects are under construction across the U.S.About 34% of the spending is attributed to the buildout of data centers.
This includes a major buildout of Amazon's (Seattle, Washington) data center footprint in Mississippi: a new campus in Canton. Construction of Phase I of the data center campus kicked off in September 2024 and is expected to wrap up around the end of the year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can view the related project reports.
Key Takeaways
- U.S. manufacturing activity contracted for the ninth straight month.
- Tariffs and economic uncertainty remain a concern for manufacturers.
- The indicators for supplier deliveries, new orders and employment declined month-over-month.
About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
