U.S. manufacturing continued to grow in September, though the pace of expansion slowed compared to earlier months, according to the latest S&P Global U.S. Manufacturing Purchasing Managers’ Index (PMI). The PMI reading for September was 52.0, down from 53.0 in August. A figure above 50 indicates growth, but the decrease points to a moderation in momentum.
Production and new orders both increased nationally, but at a reduced rate. Softer demand conditions contributed to slower production growth, while new order gains were limited by ongoing global trade issues and tariffs. Orders rose for the ninth consecutive month, but at a rate below the survey’s long-term average. Export demand fell for the third month in a row as tariffs continued to affect sales to major trading partners like Canada and Mexico.
Manufacturers remain cautiously optimistic about future business conditions. “Many firms expect that reshoring trends—bringing production back to the U.S.—and stronger domestic demand will boost business conditions in the year ahead,” said Randy Wolken, President & CEO of Manufacturers Association Of Central New York. He added that this optimism is tempered by policy uncertainty and cost pressures.
Tariffs have contributed significantly to higher input costs, leading to another month of elevated purchasing prices for manufacturers. Companies have attempted to pass some of these increased costs on to customers; however, competitive pressures and signs of weaker demand have limited their ability to raise prices further. As a result, output charge inflation dropped to its lowest level in eight months, putting additional pressure on profit margins.
Employment data showed improvement as firms expanded their workforces to fill vacancies and support growth. This hiring helped reduce outstanding workloads at the fastest rate seen in five months. Inventory levels increased for a second consecutive month as production outpaced new orders slightly. Some manufacturers built up finished goods inventories either in anticipation of stronger demand or as a precaution against ongoing supply chain uncertainties.
Overall, September’s data reflects a manufacturing sector that is growing but facing multiple challenges such as higher costs, trade disruptions, and fluctuating demand levels. Despite these obstacles, many manufacturers continue to express confidence that domestic opportunities and reshoring initiatives will help strengthen conditions moving forward.
The outlook for coming months remains uncertain as companies watch how continued policy decisions and tariff impacts may affect industrial recovery or whether businesses can adapt and sustain growth.
