ISM Manufacturing Survey Shows Continued Contraction; S&P Data Indicate Growth Slowdown

03:08 PM EDT, 10/01/2025 (MT Newswires) -- Two surveys released Wednesday presented mixed trends in the US manufacturing sector for September, with Institute for Supply Management data showing continued contraction and an S&P Global (SPGI) report indicating growth losing steam amid tariffs-related concerns.

The ISM purchasing managers' index edged up to 49.1 last month from 48.7 in August, but marked a seven straight month of contraction. A reading below 50 indicates the manufacturing sector is generally contracting. The consensus was for a 49 reading in a survey compiled by Bloomberg.

"The details of the report clearly show stagnation in the manufacturing sector, but as a small silver (lining), we may be seeing less stagflation," Vikram Rai, senior economist at TD Economics, said in a report. "Without a major change in the economic environment, it seems likely that the contraction in manufacturing will be continuing."

The new orders index swung into contraction territory in September, falling to 48.9 from 51.4 sequentially, while production improved to 51 from 47.8. The employment index rose to 45.3 from 43.8, while the prices gauge eased. The imports index dropped to 44.7 from 46, ISM data showed.

"For every positive comment about new orders, there were 1.6 comments expressing concern about near-term demand, primarily driven by tariff costs and uncertainty," said Susan Spence, chair of the ISM's manufacturing business survey committee. "Imports are contracting at a faster rate, indicating lower levels of demand due to tariff pricing."

Separately, S&P Global (SPGI) said its manufacturing PMI fell to 52 in September from 53 the month prior, as new order book growth lost momentum and tariffs continued to impact exports and drive costs higher. Employment grew "solidly," the data provider said.

"Despite a slowing in demand growth, many factories produced more goods, using up raw materials that had been stockpiled ahead of tariff implementation," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "This poses a downside risk to future production in the absence of a pickup in demand, though also hints at some alleviation of price pressures."

Recently, President Donald Trump said the US will set 10% tariffs on softwood timber and lumber and a 25% duty on certain upholstered wooden products and on kitchen cabinets and vanities, including their parts, effective Oct. 14.

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