As of November 29, 2025, the U.S. manufacturing sector remains entrenched in a prolonged contraction, marking its ninth consecutive month of decline. According to the latest data from the Institute for Supply Management (ISM), the manufacturing Purchasing Managers’ Index (PMI) for November stood at 48.2, significantly below the 50-point threshold that separates expansion from contraction. This marks another disheartening chapter in a sector that has been grappling with a series of headwinds over the past several months.
Industry leaders have pointed to several factors contributing to the sustained weakness in the manufacturing sector. A key driver has been sluggish demand, which has dampened production across various industries. Rising input costs, fueled by factors such as higher raw material prices and supply chain disruptions, have further strained the sector. In addition, the uncertainty surrounding ongoing tariffs has created an unpredictable business environment, discouraging investment and adding to the pressures faced by manufacturers.
Particularly hard-hit are industries such as transportation equipment and wood-product manufacturing, where companies have reported falling orders and shrinking output. These sectors, which are critical to the broader manufacturing ecosystem, have struggled to generate sufficient demand to maintain production levels, resulting in a further deceleration of activity.
The ripple effects of this continued contraction are also evident in employment trends within the sector. Companies across various industries have indicated headcount reductions or hiring freezes, with many opting not to replace workers who leave. This marks the 10th consecutive month of employment declines in the manufacturing sector, a troubling indicator of the sector’s ongoing weakness. The lack of new hiring reflects the uncertainty manufacturers face, as firms are hesitant to expand their workforce in the face of a challenging economic environment.
While some niche industries, such as machinery and electronics manufacturing, have reported modest growth, the overall trend remains one of persistent fragility. These sectors, which tend to be more specialized and capital-intensive, have managed to weather the storm better than broader manufacturing sectors. However, even within these niches, growth has been limited and far from enough to offset the broader downturn.
The continued contraction in U.S. manufacturing is raising concerns about the broader economic outlook for the coming quarters. With the sector’s struggles persisting well into the final months of 2025, there are growing fears that these difficulties could pose significant headwinds to overall economic growth. Manufacturing has long been a key pillar of the U.S. economy, and its ongoing weakness suggests that recovery may be slow and uneven.
As the U.S. enters 2026, the outlook for the manufacturing sector remains uncertain. The combination of weak demand, rising costs, and tariff-related uncertainties are unlikely to dissipate in the short term. For many manufacturers, these challenges are proving to be a tough obstacle to overcome, and unless there is a shift in these dynamics, the sector may continue to face a difficult road ahead. The broader economy could also feel the effects, as the manufacturing sector is intricately linked to many other parts of the economy, including employment, supply chains, and consumer demand. In this context, the continued contraction in manufacturing is a critical issue that could shape the economic landscape for months or even years to come.
