While factories across America have been struggling for months, November brought even tougher news for the manufacturing sector. The ISM Manufacturing PMI dropped to 48.2, marking the ninth straight month of contraction and hitting its lowest point in four months. Think of it like a report card where anything below 50 means things are getting worse rather than better.
The numbers paint a concerning picture across the board. About 58% of the manufacturing sector’s GDP contracted in November, while 39% experienced strong contraction with readings of 45 or lower. It’s like watching a domino effect where one struggling factory affects another, creating a chain reaction throughout the industry.
Production has been on a roller coaster ride lately. After falling to 48.2 in October from September’s healthier 51 percent, it bounced back slightly to 51.4 in November. However, this improvement wasn’t enough to pull the sector out of its slump. Only Transportation Equipment among the six largest manufacturing industries managed to increase production during this challenging period.
Trade uncertainty has become manufacturers’ biggest headache, with 78% citing it as their top concern in recent surveys. This worry isn’t just talk either. Shifting trade policies and tariffs have pushed up costs throughout 2025, and manufacturers expect their expenses to climb another 5.4% over the next year. Price pressures have intensified, rising from 58 to 58.5 in November alone. Investment in new or expanded facilities has steadily declined amid these policy uncertainties as companies delay major capital expenditures.
The employment picture adds another layer of difficulty. Nearly 13 million people work in manufacturing, but the sector lost 12,000 jobs in August as companies responded to declining demand. Workers are feeling the pinch as businesses make tough decisions about their workforce. A staggering 67% of panelists report they are managing head counts rather than actively hiring new employees.
New orders and backlogs tell a similar story of struggle. The Backlog of Orders Index tumbled to 44 in November from 47.9 in September, while new orders remained weak at 49.4. Even when there seemed to be a positive chain reaction starting with new orders in August, it couldn’t sustain meaningful growth.
For manufacturers hoping for a quick turnaround, these numbers suggest the road ahead remains bumpy. Manufacturing companies that typically pay dividend payments to shareholders may face pressure to reduce or eliminate these distributions as financial challenges mount.
