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The nation’s manufacturing sector has been in growth mode for 10 consecutive months, despite tariffs, labor constraints and geopolitical events. Led by industries like plastics and rubber products, electrical equipment and machinery, manufacturing continued to expand in October, according to the Institute for Supply Management’s (ISM) latest Manufacturing PMI Report.

The index reached 55.5%, up from 54.5% in September (a reading above 50% indicates expansion, while a reading below 50% indicates contraction), with 12 manufacturing industries reporting growth and just three reporting contraction (printing and related support activities, paper products and nonmetallic mineral products).

“In October, U.S. manufacturing activity remained in expansion territory,” said Susan Spence, chair of the ISM Manufacturing Business Survey Committee, in the report. “Of the five subindexes that make up the PMI, four (New Orders, Production, Supplier Deliveries and Inventories) grew faster than the previous month, while Employment growth slowed down by 0.3 percentage point.”

A Mixed Bag

Spence said U.S. manufacturing activity remained in expansion territory last month, with new orders, production, supplier deliveries and inventories all growing faster than the previous month. But not all of the news was positive.

“In October, general sentiment got worse for a third month in a row, with 34% of the comments positive and 66% negative (a 1-to-2 ratio of positive to negative sentiment),” she said. “Among negative comments, pricing volatility was mentioned in 62% [of them], longer lead times 41%, tariffs 25% and the Iran war 21%; most comments mentioned multiple factors.” Here's what happened across the other manufacturing indexes:

• New Orders. The index reached 55.5%, up 0.2 percentage point from September and marking its 10th consecutive month of expansion.
  
  
• Production. The index climbed 2.3 percentage points to 59%, its highest reading since November 2021.
  
  
• Employment. The index registered 52.4%, down slightly from September’s 52.7%, but remained in expansion territory.
  
  
• Supplier Deliveries. The index reached 59.1%, up from 59% in September, indicating slower deliveries for the 11th consecutive month.
  
  
• Inventories. The index returned to expansion territory at 51.4%, up 2.8 percentage points from September.
  
  
• Backlog of Orders. The index slipped 1.8 percentage points to 54.6%, but remained in expansion territory.
  
  
• Prices. The index registered 75.2%, down from 77.9% in September, marking the 25th consecutive month of rising raw material prices.
  
  
• New Export Orders. The index reached 51.2%, up from 50.9% in September.
  
  
• Imports. The index rose 1.9 percentage points to 52.9%, up from 51% in September.

Not All Companies are Convinced

The overall manufacturing sector may be 10 months into an expansion, but individual survey respondents had plenty to say about conditions in their own businesses and the markets they serve. “Global demand for capital scientific instrumentation assets has slowed due to continued uncertainty in the Middle East, Eastern Europe and China,” says one maker of computer and electronic products. “Anticipation over the midterm elections and impact to funding for scientific research and the National Institutes of Health also is impacting customers’ purchasing behavior, making them focus on optimizing existing technology and tools.”

Another manufacturer of fabricated metal products says economic policies coming out of Washington continue to weigh on business conditions. “Customers are unwilling to make commitments to anything other than the shortest term due to the vast uncertainty,” it says. “Canadian tariffs continue to damage small U.S. businesses selling into that important market.”

And a transportation equipment producer commented on how customers continue to be in a wait-and-see mode. “There is no momentum to purchase, as our customers’ customers aren’t in urgent need of equipment," it says. “[They] continue to be gobsmacked by the high price of equipment when they ask for quotes. Typically, we see a fourth-quarter bump as customers use up end-of-year budgets. This year, that bump does not exist.”