The ISM manufacturing PMI rose to 55.5 in October 2026 from 54.5, beating forecasts and marking a tenth month of expansion. Production reached its highest level since November 2021, but the prices index stayed at 75.2 and respondents’ sentiment worsened for a third month.
Global Economy Charts Research Desk | November 4, 2026
Key indicators
The ISM manufacturing PMI was 55.5 in October, up from 54.5 in September and above the 54.5 expected in a Reuters poll. Production rose to 59.0, the highest since November 2021, new orders edged up to 55.5 from 55.3, and prices paid eased to 75.2 from 77.9, a 25th month above 50. S&P Global’s final US manufacturing PMI was 54.9, below its flash estimate of 56.0 and September’s 55.9.
A reading above 50 indicates expansion. October was the tenth consecutive month above that threshold, after ten months of contraction, and 12 of the 18 manufacturing industries reported growth. ISM estimates that a PMI of 55.5 is consistent with annualised real GDP growth of about 2.7%. The separate S&P Global survey showed a slightly softer but still strong 54.9.
1. Output leads the improvement
The production index rose 2.3 points to 59.0, its highest since November 2021, while new orders edged up to 55.5. Inventories moved back into growth at 51.4, up from 48.6, and imports rose to 52.9. All five components of the headline PMI were above 50. Respondents linked strong demand to semiconductors, defence and AI-related equipment, with one machinery firm reporting lead times stretching from four weeks to 50.
2. Employment and backlogs soften
Not every indicator improved. The employment index slipped to 52.4 from 52.7, although it remained in growth for a fourth month, and the backlog of orders fell 1.8 points to 54.6. Customers’ inventories stayed at 41.6, a level ISM describes as too low, which usually supports future orders. New export orders rose only slightly to 51.2. The share of manufacturing GDP in contraction rose to 6% from 2%.
3. Price pressure remains intense
The prices index fell 2.7 points to 75.2 but has stayed above 70 since February; ISM linked the surge in the spring to the start of the Iran war and higher energy costs. ISM chair Susan Spence named steel and aluminium, tariffs on imported goods and petroleum-based products as the main drivers. Sixteen industries reported paying higher prices and none reported lower prices. Supplier deliveries remained slow at 59.1, and memory chips, copper and circuit boards were listed as in short supply.
4. Strong activity, weaker sentiment
Spence said general sentiment worsened for a third month, with 66% of comments negative. Pricing volatility, longer lead times, tariffs and the Iran war were the most common concerns, alongside uncertainty about the midterm elections. The S&P Global survey also recorded the steepest rise in selling prices since September 2022. With the Fed holding at 3.75-4.00% and markets discussing a December hike, firm activity combined with high input prices strengthens the case that inflation risks have not faded.
Scenarios to watch
If production stays near 59 while prices ease from the mid-70s, the survey would point to stronger growth with less inflationary strain. If energy, metals and component shortages persist, high input costs could feed further into consumer prices. A fall in new orders below production would signal that output is running ahead of demand. These are scenarios for monitoring, not forecasts.
Sources and methodology
ISM, October 2026 Manufacturing PMI Report, 2 November 2026; ISM release via PR Newswire, 2 November 2026; ISM January 2026 report (earlier series); S&P Global, US Manufacturing PMI, November 2026; Reuters, 2 November 2026. Federal Reserve industrial production (IPMAN); BLS manufacturing employment (MANEMP); BLS producer prices, manufacturing (PCUOMFGOMFG). ISM survey figures are cited in the text from ISM’s report; the charts use public Federal Reserve and BLS data. Reported figures are distinguished from forecasts and GEC calculations. Charts use the values and units shown; scales start at zero except where negative values or index thresholds require otherwise. Interpretive sections are GEC analysis, not company or central-bank forecasts.
Thumbnail: AI-generated editorial illustration. Figures are rounded for readability; some releases may be preliminary or subject to revision.
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