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US Manufacturing PMI Declines in December Amid Falling Orders and Output

Manufacturing and Engineering

Business Honor
05 December, 2025

US manufacturing sector faces decline in December, with reduced orders, output, and rising input costs.

The seasonally adjusted S&P Global US Manufacturing Purchasing Managers' Index (PMI) moved to 49.4 in December, falling marginally short of November's 49.7 but coming in better than the flash estimate of 48.3. New orders declined at a steeper rate in December and production fell at a faster rate than in November, when it had almost stabilized. Manufacturing output contracted for the fifth consecutive month, marking the biggest fall in a year and a half. It was thought that the fall was driven by new orders-the fall itself intensified in December, with new export orders, for example, including those from Europe and Australia, also dropping.

Customers said they were less willing to start new projects, with some waiting for the new administration, which would be taking power in January. Business confidence, having jumped by a lot in November, declined to its lowest point since August in December. But on the other hand, employment improved slightly for the second consecutive month. Though the overall sentiment fell, manufacturers continued to be optimistic and hoped demand would pick up in 2025.

Manufacturers faced increasing input costs in December that pushed the output price for the third month running. Input cost inflation accelerated strongly to its strongest pace since August, and this was largely on the back of raw material prices and supplier prices. This is partly due to delivery times being the worst since October 2022, facilitated by workforce shortages and freight problems.

According to Chris Williamson, chief business economist at S&P Global Market Intelligence, US factories ended 2024 on a tough note as production declined for the third consecutive month, partly due to weak inflows of new orders. However, many firms remain optimistic that business will pick up in the new year, hoping that the new administration will reduce regulations and boost demand for US-made goods.