December Manufacturing Output Growth Decelerates, Outlook Wanes, S&P Global Data Show

01:41 PM EST, 01/02/2026 (MT Newswires) -- US manufacturing output growth decelerated in December as new orders fell for the first time in a year, while firms' outlook waned slightly, S&P Global (SPGI) said Friday.

The manufacturing purchasing managers' index for last month was unrevised from the flash reading of 51.8, dropping from November's 52.2 reading and matching the consensus estimate in a survey compiled by Bloomberg. The 50-point mark separates expansion from contraction.

The data provider described the decline in new orders as "mild" and said prices remained under pressure from tariffs. Employment growth was sustained into year-end, with job creation "the most pronounced" since August, S&P Global (SPGI) said.

"Something of a Wiley E Coyote scenario has developed, whereby -- just like the cartoon character continues to run despite chasing the roadrunner off a cliff -- factories are continuing to produce goods despite suffering a drop in orders," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "The gap between growth of production and the drop in orders is in fact the widest seen since the height of the global financial crisis back in (2008-2009)."

While manufacturing firms held a positive outlook about the year ahead for production and sales, the degree of confidence eased since November amid a lack of new work to replace existing orders and persistent uncertainty over tariffs and trade policy, the report showed.

"Unless demand improves, current factory production levels are clearly unsustainable," Williamson said. "Payroll numbers will also be adversely impacted if production capacity has to be scaled back."

While both input and output prices increased in December at the slowest pace in 11 months, S&P Global (SPGI) said they remained historically elevated.

"A key factor causing concern over sales is the extent to which producers are having to pass higher costs on to customers in the form of raised prices, with higher costs continuing to be overwhelmingly blamed on tariffs," Williamson said.

Price: 515.19, Change: -7.41, Percent Change: -1.42

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