ISM Manufacturing PMI — June 2025
Headline: The Manufacturing PMI rose 0.5 point to 49.0, but remained in contraction for the fourth consecutive month. The reading was below its six-month average of 49.4, though within the prior six-month range of 48.5–50.9. Manufacturing therefore remained below the 50.0 breakeven line, while the broader economy continued to grow; the overall-economy breakeven is 42.3.
Sub-indices:
| Index | Level | Prior | Change | Direction | vs 6-mo |
|---|---|---|---|---|---|
| New Orders | 46.4 | 47.6 | -1.2 | Contracting | below avg (49.4) |
| Production | 50.3 | 45.4 | +4.9 | Growing | above avg (48.5) |
| Employment | 45.0 | 46.8 | -1.8 | Contracting | below avg (46.9) |
| Supplier Deliveries | 54.2 | 56.1 | -1.9 | Slowing | above avg (53.4) |
| Inventories | 49.2 | 46.7 | +2.5 | Contracting | above avg (49.2) |
| Customers' Inventories | 46.7 | 44.5 | +2.2 | Too Low | above avg (46.0) |
| Prices | 69.7 | 69.4 | +0.3 | Increasing | above avg (63.1) |
| Backlog of Orders | 44.3 | 47.1 | -2.8 | Contracting | below avg (45.5) |
| New Export Orders | 46.3 | 40.1 | +6.2 | Contracting | below avg (47.8) |
| Imports | 47.4 | 39.9 | +7.5 | Contracting | below avg (48.4) |
Key moves:
- Production jumped 4.9 points to 50.3, crossing into expansion and moving above its six-month average of 48.5.
- New Export Orders and Imports posted large rebounds of 6.2 and 7.5 points, respectively, but both remained below 50 and below their six-month averages.
- Prices rose to 69.7, just below the six-month high of 69.8 and well above the six-month average of 63.1.
Insights:
- The output rebound does not yet signal a durable demand recovery: Production crossed 50, but New Orders fell to 46.4, their fifth consecutive month of contraction, while Backlog of Orders dropped to 44.3 and remained in contraction for a 33rd month.
- The rise in manufacturers’ Inventories to 49.2 appears more cautionary than voluntary. Inventories increased as New Orders weakened, pointing to potential buildup against soft demand rather than deliberate stocking for a stronger order pipeline.
- Customers’ Inventories at 46.7 remain “too low,” a contrarian positive for future production because depleted downstream stocks may require replenishment. That support is offset by the continued deterioration in orders and backlogs.
- Supplier Deliveries at 54.2 still indicate slower deliveries, above the six-month average despite easing from May. This is consistent with some supply tightness or firm demand for inputs, but it has not translated into broad manufacturing expansion.
- Employment weakened to 45.0, its fifth consecutive month of contraction, reinforcing that the improvement in the headline and production has not yet reached factory hiring. Meanwhile, Prices at 69.7 indicate persistent and elevated input-cost pressure, posing a margin and goods-inflation risk.
Breadth & prices: Nine industries reported growth and none reported contraction. Input prices continued to increase, with the Prices Index at 69.7; reported increases included steel, aluminum, electronic components and packaging materials, while