U.S. Manufacturing PMI Shows Mixed Signals in September 2026
The U.S. manufacturing sector expanded for a ninth consecutive month in September 2026.
The U.S. manufacturing PMI registered 54.5% in September 2026. The figure was 0.1 percentage point lower than in August, as the overall economy grew for the 23rd consecutive month.
Prices rise sharply while production and new orders diverge
The underlying components of the index presented a conflicting picture. The Prices Index jumped sharply to 77.9%, a notable increase of 6.8 percentage points from August. This surge in input costs occurred even as the Production Index fell to 56.7%, down 1.6 points. New orders showed modest growth, with the New Orders Index rising to 55.3%, up 1.6 points from the previous month.
| Index | September 2026 | Change from August |
|---|---|---|
| Prices Index | 77.9% | +6.8 points |
| Production Index | 56.7% | -1.6 points |
| New Orders Index | 55.3% | +1.6 points |
| Backlog of Orders Index | 56.4% | +4.6 points |
Employment grows but backlog and inventories signal caution
Employment conditions improved slightly, with the Employment Index rising to 52.7%, a 1.5-point increase. The manufacturing industry added 16,000 jobs in August. However, other indicators suggested potential headwinds. The Inventories Index declined to 48.6%, indicating contraction, while supplier deliveries slowed only marginally. The Backlog of Orders Index increased significantly to 56.4%.
Export and import activity weakens amid mixed industry performance
International trade flows softened. The New Export Orders Index fell to 50.9%, down 2.3 points, and the Imports Index dropped to 51%, down 1.5 points. Despite this, five of the six largest manufacturing sectors reported expansion in September. The expanding industries were computer and electronic products; food, beverage and tobacco products; transportation equipment; machinery; and chemical products.
ISM leadership cites trade tensions and price volatility as top concerns
Susan Spence, chair of ISM’s Manufacturing Business Survey Committee, highlighted persistent worries. She stated that sentiment is erratic, with new orders and employment showing an up-down pattern month to month. In September, only 40% of survey comments were positive, resulting in a 1-to-1.6 ratio of positive to negative sentiment. Among negative comments, pricing volatility was cited by 46% of respondents, tariffs by 34%, the Iran war by 30%, and increasing lead times by 21%.
Spence warned that geopolitical friction is a primary driver of inflation pressure. "The most recent surge in price growth has renewed my concern about price volatility," she said during a media call. She added, "Trade wars, chaos, whatever you care to call it, is really what’s affecting inflation."
Industry respondents echoed these concerns. One executive in computer and electronic products cited challenges in finding alternate supply sources outside of China and ongoing material shortages. A machinery industry respondent confirmed that tariffs are causing problems despite healthy order books. Sentiment remains volatile and, in Spence's view, certainly worrisome, particularly regarding tariffs imposed by the Trump administration on Canada and the subsequent retaliatory measures.
