ISM Manufacturing Index | October 2025

The Institute for Supply Management (ISM) Manufacturing Index fell 0.8 points month over month to 48.7 in October, coming in below the forecast of 50.

A reading below 50 indicates contraction in U.S. manufacturing activity. The New Orders subindex registered 49.4, also signaling a modest slowdown in demand.

Subindex Performance:

• Backlogs: 47.9
• Inventories: 45.8

Despite the overall decline, six industries reported growth in October, led by Primary Metals; Food, Beverage & Tobacco Products; Transportation Equipment; Plastics & Rubber Products; Fabricated Metal Products; and Nonmetallic Mineral Products.

Meanwhile, 12 industries experienced contraction, including Textile Mills; Apparel, Leather & Allied Products; Furniture & Related Products; Paper Products; Printing & Related Support Activities; Wood Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Chemical Products; Machinery; Miscellaneous Manufacturing; and Computer & Electronic Products.

Respondents noted continued challenges across key manufacturing sectors:

“Sales continue to underperform in our automotive OEM and industrial divisions. Our aerospace and automotive aftermarket are the only areas performing slightly above budget. This is the third month of lower-than-expected sales, and the remainder of the year outlook is not looking better. Sales are expected to be slightly less than in 2024.” — Fabricated Metal Products

“The commercial vehicle (CV) market remains depressed as customers continue to delay vehicle purchases. Uncertainty in price and transportation demand remains the center of attention. U.S. trade policy and reciprocal actions by China in the form of export controls on rare earths and semiconductors, as well as ocean freight carrier restrictions, have once again caused a lot of stress in supply lines.” — Transportation Equipment

The ISM index is derived from surveys of 300 purchasing managers across 17 industries. It is a diffusion index, where readings above 50 indicate expansion and readings below 50 indicate contraction.

At Gerdau, we closely monitor the ISM Manufacturing Index as a key indicator of both current conditions and near-term expectations in U.S. manufacturing. This data helps us assess demand trends across key steel-consuming industries and better understand the evolving market landscape.