ISM Manufacturing Index:

The Institute for Supply Management’s manufacturing index moved up 0.7% (m/m) to 49.1 for September 2025; this value is weaker than the forecast of 50. The new orders sub-index scored at 48.9. 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 46.2 this month, while the inventories sub-index was 47.7.

The five manufacturing industries reporting growth in September are:

1. Petroleum & Coal Products

2. Primary Metals

3. Textile Mills

4. Fabricated Metal Products

5. Miscellaneous Manufacturing

The 11 industries reporting contraction in September — in the following order — are:

1. Wood Products

2. Apparel, Leather & Allied Products

3. Plastics & Rubber Products

4. Paper Products

5. Furniture & Related Products

6. Chemical Products

7. Electrical Equipment, Appliances & Components

8. Transportation Equipment

9. Nonmetallic Mineral Products

10. Machinery

11. Computer & Electronic Products.

 

“Tariffs still affecting vast amounts of increases in hardware, Al (artificial intelligence) and stainless steel. MRO (maintenance, repair and operating) products have continually increased, and the slowdown in agriculture has had stark impacts on bottom lines for raw materials.” - (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.