U.S. manufacturing continued to grow in September, though at a slower pace than previous months, according to the latest S&P Global U.S. Manufacturing Purchasing Managers’ Index (PMI). The PMI registered 52.0 in September, down from 53.0 in August. A reading above 50 indicates growth in the sector.
The survey indicated that both production and new orders increased nationally, but at reduced rates compared to earlier periods. Production growth slowed due to softer demand conditions, while new order growth weakened as global trade challenges and tariffs persisted. Orders rose for the ninth consecutive month but did so modestly, remaining below the survey’s long-term average. Export demand declined for the third straight month as tariffs affected sales to key trading partners such as Canada and Mexico.
Despite these difficulties, manufacturers remain cautiously optimistic about future prospects. Many expect that reshoring trends and stronger domestic demand will improve business conditions over the next year. However, ongoing policy uncertainty continues to affect investment and hiring decisions, while cost pressures are still significant.
Tariffs have contributed to higher input costs for manufacturers, resulting in another month of elevated purchasing prices. Companies attempted to pass some of these costs on to customers but faced limitations due to competitive pressures and signs of weaker demand. As a result, output charge inflation fell to an eight-month low, putting further strain on profit margins.
Employment data showed positive movement as firms expanded their workforces to fill vacancies and support business growth. This helped reduce backlogs of uncompleted work; outstanding workloads declined at the fastest rate in five months because increased labor capacity allowed companies to meet demand more effectively. Inventory levels also grew for a second consecutive month as production slightly outpaced new orders. Some companies built up stocks of finished goods either in anticipation of stronger future demand or as a buffer against ongoing supply chain uncertainties.
Randy Wolken, President & CEO of Manufacturers Association Of Central New York stated: “Growth continues, but at a slower and more uneven pace. Firms are contending with higher costs, trade disruptions, and fluctuating demand, yet many still express confidence that domestic opportunities and reshoring initiatives will strengthen conditions over time.”
The outlook for U.S. manufacturing remains uncertain amid policy debates and tariff issues that could impact recovery or force further adjustments by manufacturers in coming months.
