U.S. Manufacturing Activity Survey Shows Slowing Contraction, Less Positive Outlook

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Although overall manufacturing activity in the U.S. remains in contraction territory, according to a survey by the Institute for Supply Management (ISM), activity improved in November when compared with October amid some positive signs for demand. However, survey respondents expressed a less encouraging outlook for activity moving forward.

The ISM's Purchasing Manager's Index (PMI), which tracks 18 industry sectors in the U.S., registered 48.4% in November, up from 46.5% in October, 47.2% in September and August, and 46.8% in July. Any reading under 50% indicates contraction in the manufacturing economy. The last reading above 50% was in March.

In a related summary of the findings, Timothy Fiore, chair of the ISM's Manufacturing Business Survey Committee, said, "U.S. manufacturing activity contracted again in November, but at a slower rate compared to last month. Demand continues to be weak but may be moderating, output declined again, and inputs stayed accommodative." He pointed to a resurgence of demand, indicated by the New Orders Index returning to expansion territory and the New Export Orders Index increasing moderately (up 3.2 percentage points but still in contraction territory). In addition, contraction for the Production Index slowed.

The New Orders Index expanded in November after seven consecutive months in contraction, although "panelists again noted a continued level of uncertainty and concern about a lack of new order activity, with a 1-to-1 ratio of positive comments versus those expressing concern about near-term demand."

Despite the boost in demand in November month over month, some survey respondents offered a less positive outlook moving forward. One from Transportation Equipment said, "Business remains slow. We anticipate that the first half of 2025 will be similar and hope that demand increases in the second half of 2025." Another from Fabricated Metal Products said, "Business is slowing as customers destock and appear uncertain about near-term demand. Preliminary forecast for 2025 is down significantly; we hope to see improvements now that we are beyond U.S. election uncertainties."

Despite any headwinds affecting U.S. manufacturing activity, Industrial Info is tracking billions' worth of U.S. Industrial Manufacturing Industry projects set to kick off in the first quarter, which include $100 million-plus investments in the data center sector. Tech giants such as Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington), Facebook and Instagram parent Meta Platforms Incorporated (NASDAQ:META) (Menlo Park, California) and Amazon (NASDAQ:AMZN) (Seattle, Washington) account for many of these projects.

Meta expects two data center expansions will begin construction: a $800 Phase III expansion at its hyperscale data center campus in Temple, Texas, which is part of a planned 900,000-square-foot data center, and a $100 million Building 7 expansion at its data center in Mesa, Arizona. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can read detailed reports on the Texas and Arizona projects, both of which are expected to wrap up by the end of 2026.

Amazon also is planning two expansions designed to wrap up in 2026, both of which are aimed at expanding data services in eastern Virginia--in Chantilly and Manassas, respectively.

Two other data center projects expected to kick off next quarter and wrap up in 2026 are attributed to Microsoft: construction of a $400 million grassroot data center (DSM16) in West Des Moines, Iowa involves a 245,000-square-foot building, while a second-phase expansion in San Antonio, Texas would add a 245,000-square-foot building as part of a three-phase 730,000-square-foot development. Subscribers can read more information on the Iowa and Texas projects.

Also in San Antonio is a planned high-dollar manufacturing project in the automotive sector. Toyota Motor Corporation (NYSE:TM) (Toyota City, Japan) is gearing up for an expansion at its Toyota Motor Manufacturing Texas (TMMTX) truck and SUV assembly plant. The 500,000-square-foot building addition will boost production capacity at the plant, which exclusively produces Toyota's Sequoia SUV and Tundra pickup truck. Construction is expected to wrap up by the end of 2026. For more information, see the detailed project report.

In terms of semiconductor manufacturing, Microchip Technology Incorporated's (NASDAQ:MCHP) (Chandler, Arizona) $880 million expansion of its semiconductor fabrication plant in Colorado Springs, Colorado is tentatively set to kick off. The project entails performing building renovations/upgrades and installing new assembly lines and equipment to change production from six-inch semiconductor wafers to eight-inch wafers for a variety of industries. Click here to read the project report.

Subscribers to Industrial Info's GMI Database can click here for a look at all of the projects discussed in this article and here for the plant profiles.

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) 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 over 200,000 current and future projects worth $17.8 Trillion (USD).