ISM Manufacturing Contracts For The 35th Time In 37 Months

By Mish Shedlock of MishTalk

Monday, December 1, 2025 3:32 PM EST

(Click on image to enlarge)

ISM chart and excerpts below by permission from the Institute for Supply Management® Highlights mine.

Please consider the November 2025 Manufacturing ISM® Report On Business® .

Economic activity in the manufacturing sector contracted in November for the ninth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation’s supply executives in the latest ISM® Manufacturing PMI® Report.

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

“Decreases in two of the four demand indicators (Backlog of Orders and New Orders) overwhelmed the gains posted by the New Export Orders and Customers’ Inventories indexes.

“Regarding output, production jumped into expansion, but employment contracted at a faster pace, as 67 percent of panelists (the same as October) indicated that managing head counts is still the norm at their companies, as opposed to hiring.

A New Orders Index above 52.1 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

What Respondents Are Saying (Emphasis Mine)

“New order entries are within the forecast. We have increased requests from customers to get their orders sooner. Transit time on imports seems to be longer.” (Machinery)
“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.” (Transportation Equipment)
“Tariffs and economic uncertainty continue to weigh on demand for adhesives and sealants, which are primarily used in building construction.” (Chemical Products)
“No major changes at this time, but going into 2026, we expect to see big changes with cash flow and employee head count. The company has sold off a big part of the business that generated free cash while offering voluntary severance packages to anyone.” (Petroleum & Coal Products)
“Business conditions remain soft as a result of higher costs from tariffs, the government shutdown, and increased global uncertainty.” (Miscellaneous Manufacturing)
“The unstable market has made pricing fluctuate in a very volatile way; I have had to reduce suppliers for raw materials to maintain a better direct cost structure. Reducing my suppliers has reduced the availability of some items and created longer lead times.” (Fabricated Metal Products)
“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. The delta is smaller now, reducing margins.” (Computer & Electronic Products)
“The government shutdown has impacted our access to agricultural data, impacting agricultural markets and, as a result, decisions we make. Optimism for a tariff exemption on palm oil percolated but hasn’t come to fruition at this time.” (Food, Beverage & Tobacco Products)
“Trade confusion. 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.” (Electrical Equipment, Appliances & Components)
“Domestic and export business have been lackluster. Our customers are taking prompt orders only and still don’t have confidence to build inventory, much less make expansion plans. In fact, most of any kind of ‘planning’ has been undermined by unpredictability due to inconsistent messaging from Washington. Artificial intelligence is in its infancy stages, producing confusing and most often inaccurate information. This also causes apprehensive consumer buying patterns, contributing to the challenge of forecasting demand.” (Wood Products)

Important Respondent Comments

Please ponder comments 2, 4, 6, 9, and 10. Comment number 2 is particularly interesting. Did you catch it?

“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.” (Transportation Equipment)

Hoot of the Day: That company is developing more offshore manufacturing and firing US staff, not bringing more manufacturing back to the US.

It would be interesting to have a company name, but it’s best for them if it’s secret. If disclosed, Trump would be sure to go after them.

Another Hoot: Comment 4 – “The company has sold off a big part of the business that generated free cash while offering voluntary severance packages to anyone.” (Petroleum & Coal Products)

Q: Why is a Petroleum & Coal Products company struggling?
A: My guess is retaliatory tariffs by China, just as happened to US soybean exporters.

But that’s OK. I hear great things are coming in 2026.

Trump Adopts Chicago Cubs’ Perpetual Message, “Wait Till Next Year”

Please note Trump Adopts Chicago Cubs’ Perpetual Message, “Wait Till Next Year”

“One Big Beautiful Bill” did not resonate. Trump opts for “Wait Till 2026”

But “Wait Till 2026” is a fundamental mistake. When 2026 is bad, the message will have to change.

The beauty of a more Cub-esque “Wait Till Next Year” is the slogan never has to change.