U.S. manufacturing activity shrank in June for the fourth consecutive month, underscoring continued weakness in the industrial economy as demand falters and hiring slows.
The Institute for Supply Management (ISM) reported on Monday that its closely watched Manufacturing Purchasing Managers’ Index (PMI) registered 49.0 in June, up slightly from May’s 48.5 but still below the neutral 50-point threshold that signals expansion. The reading reflects ongoing contraction in a sector weighed down by falling new orders, declining employment, and uncertainty over trade policy.
“U.S. manufacturing slowed its rate of contraction, with inventories and production improving,” said Susan Spence, chair of ISM’s Manufacturing Business Survey Committee. “But demand remains mixed, and hiring is down.”
The New Orders Index fell to 46.4, marking its fifth consecutive month of decline. The Employment Index dropped further to 45.0, while the Production Index edged back into growth territory at 50.3. Meanwhile, the backlog of orders shrank again, signaling continued weakness in future demand.
Business sentiment remains grim across several key industries. A respondent in fabricated metals reported that business has “notably slowed,” while a machinery executive warned that the ongoing “tariff mess has utterly stopped sales globally and domestically.”
Nine of the 18 manufacturing industries reported growth in June, including petroleum, electronics, and food products. But six sectors — including textiles, chemicals, and transportation equipment — reported contractions. Several manufacturers cited rising material costs and ongoing global instability as major concerns. An executive in the primary metals industry described the current environment as “hellacious,” warning of worsening supply chain disruptions.
Overall, ISM said 46% of the manufacturing sector contracted in June, with 25% experiencing what the organization classified as “strong contraction” — a sharp increase from just 5% in May.
While the broader U.S. economy continues to grow, the data shows that the manufacturing sector — long a bellwether of industrial health — remains under significant pressure.
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