Manufacturing Sector Shows Continued Growth in September 2026 ISM PMI Report

Economic activity in the U.S. manufacturing sector has exhibited remarkable growth for the ninth consecutive month, according to the latest ISM® Manufacturing PMI® Report released on October 1, 2026. The Manufacturing PMI was reported at 54.5%, just slightly down from the previous month’s 54.6%. This consistent growth is a promising indicator for the economy, signaling ongoing expansion.

Susan Spence, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee, highlighted that the overall economy has been expanding for 23 months, with a PMI value above 47.5% indicating a generally growing economy over time. The New Orders Index also demonstrated robust growth at 55.3%, marking a notable increase from August’s 53.7%. This is critical as it reflects increasing demand across the manufacturing industry.

In terms of production, the Production Index registered at 56.7%, albeit experiencing a slight decline of 1.6 percentage points from August. However, production has been in an expanding phase for 11 straight months, showcasing solid overall output. The continued expansion in these indices indicates that manufacturers are responding well to the increased demand.

Employment in the Manufacturing Sector

The ISM Employment Index has also followed suit, recording a reading of 52.7%, indicating an increase from the prior month’s 51.2%. A majority of manufacturing industries reported employment growth, particularly in the electrical equipment, appliances, components; primary metals; and plastics and rubber products sectors. The positive sentiment in hiring illustrates a healthy job environment, leading to a ratio of 1.5 positive comments for every negative comment.

Supplier Deliveries and Inventories

Interesting dynamics are apparent in supplier deliveries as well. The Supplier Deliveries Index showed slower performance for the tenth consecutive month, with a reading of 59%, indicating that economic improvement has led to increased demand and consequently, slower deliveries. Slightly concerning was the Inventories Index, which fell to 48.6%, signifying that inventories contracted for the first time in a period of growth.

Price Increases and Economic Sentiment

Pricing pressures continue to be a major theme, as the Prices Index surged to 77.9%, up dramatically from August's 71.1%. Price increases are often linked to rising steel and aluminum costs, alongside pressures stemming from tariffs and geopolitical tensions, further exacerbated by events such as the ongoing Iran conflict. Notably, 58.6% of manufacturers reported increased prices in September, calling for businesses to adapt swiftly to this inflationary environment.

Industry Performance

Several industry sectors are shining in this economic landscape, with 12 industries noting growth in September, including electrical equipment, appliances, components; computer electronic products; and fabricated metal products among others. Conversely, only two industries reported contractions: textile mills and printing support activities.

With comments from executives indicating a cautious optimism amid ongoing geopolitical uncertainties and challenges like pricing volatility and supply chain issues, the outlook remains guarded. Nonetheless, this month marks a robust continuity in the growth trajectory for U.S. manufacturing.

Conclusion

In conclusion, the September 2026 ISM® Manufacturing PMI® Report highlights an ongoing expansion in the manufacturing sector, with growth across multiple indices suggesting a resilient economic framework. As businesses navigate through challenges, the focus remains on continued recovery and adapting strategies that account for price fluctuations and supply chain management. For manufacturers, the key will remain in balancing the immediate concerns against a backdrop of expanding opportunities as market dynamics evolve in the coming months.