US Manufacturing Sector Ends 2026 At Weakest In Over A Year

The US Manufacturing sector ended 2026 on a down-note as yet another 'soft' survey data disappointed with ISM reporting at 47.9 (below the 48.4 expected) - the 10th consecutive month below 50 (contraction)...

Source: Bloomberg

Despite strong 'hard' data, that is the weakest print for ISM Manufacturing since Oct 2024.

The decline in the measure reflected producers drawing down their raw materials inventories at the fastest rate since October 2024.That indicates many firms are relying on existing stockpiles to satisfy tepid demand.

Plus, materials costs remain elevated.

The ISM prices-paid index, which held at 58.5 last month, is 6 points higher than it was at the end of 2024.

New orders contracted for a fourth monthand export bookings remained weak, based on the ISM data. Headcount shrank for an eleventh straight month,albeit at a slower pace, amid modest production growth.

The ISM's gauge of imports shrank to a seven-month low,while supplier delivery times slowed and order backlogs continued to shrink.

Respondents remain focused on the 't' word...

But looking ahead, abating tariff uncertainty and the passage of the One Big Beautiful Bill Act are anticipated to offer a tailwind to capital expenditures this year.

Will the soft data catch up to the hard data? Or vice versa?