RismadarVoice Reporters
January 6, 2026
Manufacturing activity in the United States continued to weaken in December, contracting for the tenth consecutive month as new orders declined further, production costs remained elevated.
Data from the Institute for Supply Management showed the manufacturing Purchasing Managers’ Index fell to 47.9 in December, the lowest level in fourteen months. A reading below 50 indicates contraction.
The latest figure reflects persistent pressure on the sector, largely linked to import tariffs and soft demand conditions.
New orders remained in contraction, while production and inventories pulled back after brief improvements in November.
Factory employment also declined for the eleventh straight month, marking the longest hiring slump in about five years by the survey’s measure.
Manufacturers across several industries reported weakening demand and falling order volumes.
Most sectors, including chemical products, machinery, transportation equipment and fabricated metals, recorded contraction.
Only electrical equipment, computer, electronic products showed signs of growth.
Survey respondents described business conditions as increasingly difficult, citing declining bookings, shrinking margins and reduced customer demand.
Some manufacturers reported revenue declines linked directly to tariffs, while others noted that customers were placing smaller orders for 2026 than in previous years.
Input costs remained high, with the prices paid index staying elevated, adding to inflationary pressures already above the Federal Reserve’s two percent target.
Analysts noted that higher costs and uncertain demand continue to weigh heavily on factory output and hiring decisions.
Economists remain cautious about the pace of any recovery, pointing to structural challenges such as labour shortages, reduced trade flexibility.
While recent tax measures and possible tariff exemptions could provide limited relief in the coming months, uncertainty continues to cloud the outlook for the manufacturing sector.
Despite the prolonged contraction, broader economic activity has remained resilient, as manufacturing represents just over ten percent of the U.S. economy. However, analysts warn that sustained weakness in factories could pose risks to growth, if conditions fail to improve in 2026.
