US Manufacturing Sector Shows Signs of Stabilization in June 2025, PMI Remains Below Expansion Threshold
NEW YORK, NY – July 1, 2025 – The US manufacturing sector demonstrated a degree of stabilization in June 2025, as indicated by the latest Manufacturing ISM® Report On Business®, released today by the Institute for Supply Management (ISM). The Manufacturing Purchasing Managers’ Index (PMI) registered at 49 percent, a slight uptick from the previous month, suggesting a moderating pace of contraction within the industry.
While the PMI remains below the 50 percent threshold, which typically signifies expansion, the increase from May’s reading offers a glimmer of optimism for manufacturers. A reading of 49 percent indicates that the manufacturing economy is still contracting, but at a less pronounced rate than in prior periods.
The report highlights that out of the 18 manufacturing industries surveyed, nine reported growth in June. These include industries such as Apparel,
Key components of the PMI also presented a mixed but generally less negative picture. The New Orders Index, a critical indicator of future manufacturing activity, registered 47.7 percent in June, a modest increase of 1.4 percentage points from May. This suggests that while demand remains subdued, it has not deteriorated further. Similarly, the Production Index stood at 49.4 percent, up 1.7 percentage points from the previous month, indicating that production levels are nearing stability.
The Employment Index, however, declined by 0.7 percentage points to 47.1 percent in June. This decrease implies that manufacturers are still reducing their workforces, albeit at a slightly slower pace than anticipated by some. The Prices Index also rose by 3.2 percentage points to 54.3 percent, indicating that the cost of raw materials and supplier prices are beginning to increase again.
In terms of inventory management, the Customers’ Inventories Index registered 45.6 percent, down 2.1 percentage points from May. A reading below 50 percent suggests that customers’ inventories are considered too high, which can lead to reduced orders for manufacturers. However, the slight decrease might imply a gradual adjustment in inventory levels.
The New Export Orders Index, a measure of international demand for US manufactured goods, saw a slight decrease of 1.2 percentage points to 47.6 percent in June. This suggests that foreign demand, while still contracting, has seen a marginal slowdown in its rate of decline.
Commenting on the report, Timothy R. Fiore, CPSM, Chair of the ISM Manufacturing Business Survey Committee, noted the slight improvement in the overall manufacturing sentiment. He highlighted that while the contraction persists, the upward movement in key indices suggests a potential shift towards a more stable operating environment in the coming months, provided current trends continue.
The report underscores the ongoing challenges faced by the US manufacturing sector, including the lingering effects of supply chain adjustments and fluctuating demand. Nevertheless, the June figures offer a sense of cautious optimism, with a stabilization in the rate of contraction and some positive movements in order and production indicators. Manufacturers will be closely watching economic developments and consumer confidence in the second half of 2025 for further clarity on the sector’s trajectory.
Manufacturing PMI® at 49%; June 2025 Manufacturing ISM® Report On Business®
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