WASHINGTON / December 2, 2025 — U.S. manufacturing activity continued to contract in November, marking the ninth straight month of decline, as factories grappled with falling orders and higher input costs, while the effects of import tariffs persisted.

The Institute for Supply Management (ISM) reported on Monday that its Manufacturing Purchasing Managers’ Index (PMI) fell to 48.2 in November from 48.7 in October. Any reading below 50 indicates contraction in manufacturing, which represents 10.1% of the U.S. economy. Economists had expected the PMI to rise to 49.0.

Despite the contraction, the ISM noted that the PMI remained above 42.3, a level historically consistent with overall economic expansion.

The ISM’s new orders sub-index dropped to 47.4 from 49.4 in October, showing ongoing weakness in demand, while unfilled orders continued to shrink. Exports improved slightly, but forward-looking indicators suggest challenges ahead.

Input costs remain elevated, with the ISM’s prices paid index rising to 58.5 from 58.0, indicating that inflation pressures in the manufacturing sector could persist. Meanwhile, the supplier deliveries index fell to 49.3 from 54.2, reflecting faster deliveries due to weaker demand.

Factory employment also continued to decline, marking the 10th consecutive month of contraction as manufacturers continued staff reductions amid uncertain near- and mid-term demand.

The Federal Reserve’s Beige Book report last week highlighted a further decline in overall consumer spending by mid-November. While some of the Fed’s districts reported modest increases in manufacturing, tariffs and tariff uncertainty were cited as persistent headwinds.

President Donald Trump has defended his sweeping import duties as necessary to protect domestic manufacturing. However, economists argue that structural challenges—such as labor shortages—make it difficult to restore the industry to its former scale.

Legal uncertainty over the tariffs has also emerged. Last month, U.S. Supreme Court justices questioned the legality of Trump’s import duties, fueling speculation that a ruling against the tariffs could prompt shifts to alternative trade strategies.