ISM Manufacturing Index: The Institute for Supply Management’s manufacturing index moved up 1.0% (m/m) to 49.0 for June 2025; this value is weaker than the forecast of 50. The new orders sub-index scored at 46.4. Overall, the ISM manufacturing index is strong, while the global economy is beginning to strengthen again following shutdowns throughout Covid-19.

The ISM manufacturing index is based on surveys of 300 purchasing managers in 17 industries. The survey is a diffusion index calculated as a percent of responses. A value of 50 is neutral, while less than 50 denotes contracting manufacturing activity and greater than 50 denotes expanding activity.

Figure 1 breaks down the composite index and sub-indexes. The backlogs sub-index was 44.3 this month, while the inventories sub-index was 49.2.

The nine manufacturing industries reporting growth in June — listed in order — are: Apparel, Leather & Allied Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Furniture & Related Products; Computer & Electronic Products; Machinery; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The six industries reporting contraction in June — in the following order — are: Textile Mills; Wood Products; Paper Products; Chemical Products; Transportation Equipment; and Fabricated Metal Products.

“Business has notably slowed in last four to six weeks. Customers do not want to make commitments in the wake of massive tariff uncertainty.” [Fabricated Metal Products]

At Gerdau, we closely monitor the ISM manufacturing index since it is an excellent barometer of the present strength, as well as a window on the likely short-run future, of U.S. manufacturing.