U.S. Manufacturing Contracts for 10th Consecutive Month

U.S. Manufacturing Contracts for 10th Consecutive Month

U.S. manufacturing activity declined for the 10th straight month in December, underscoring persistent caution among companies and raising concerns about near-term demand for industrial real estate.

The latest survey from the Institute for Supply Management (ISM) showed broad-based weakness across the sector, with declines in new orders, employment, imports and exports. Production increased in a handful of industries, including computers and electronics, but those gains were not enough to offset overall softness.

ISM’s headline manufacturing index came in at 47.9 for December, signaling contraction. Readings below 50 indicate declining activity. The December result was the lowest monthly reading of 2025, according to Susan Spence, chair of ISM’s Manufacturing Business Survey Committee, in a report released Monday.

Economists at Oxford Economics said elevated prices and ongoing economic uncertainty continue to weigh heavily on manufacturing sentiment. Still, they see tentative signs of improvement heading into 2026.

“Low customer inventories point to stronger new orders ahead, while the delayed effects of a weaker dollar should support export demand,” said Matthew Martin, senior U.S. economist at Oxford Economics.

Despite expectations that lower interest rates and easing tariff pressures could provide relief, manufacturers remain focused on controlling costs. Companies are continuing to manage head counts and reduce overhead in response to near-term demand concerns, relying on layoffs as well as attrition, Martin added.