Manufacturers/End Users
July 1, 2026
ISM: Manufacturing sector expands for sixth consecutive month
Written by Laura Miller
The US manufacturing sector expanded in June but at a slower pace than the month before, according to the Institute for Supply Management’s (ISM) latest Manufacturing PMI Report.
The ISM’s manufacturing PMI came in at 53.3% in June, down by 0.7 percentage points from May.
A diffusion index, the PMI indicates expansion above 50 and contraction below that level.
June marked the sixth consecutive month of manufacturing growth and the 20th consecutive month of overall economic growth.
“In June, 34% of the comments were positive and 66% negative, with a 1-to-1.9 ratio of positive to negative sentiment,” said Susan Spence, chair of the ISM Manufacturing Business Survey Committee. “Among negative comments, the Iran conflict was mentioned in 31% and tariffs in 17%; 50% of the panelists mentioned pricing volatility as an issue for their companies.”
New orders, at 56%, expanded for the sixth month in a row but were down slightly from May.
The production index was also slightly down from May, at 52.2%. The backlog of orders index came in at 50.5%, just making the cut for expansion territory.
The customers’ inventory index, at 42.3%, was again in “too low” territory, contracting faster than demand indicators. ISM noted that a “too low” status is generally considered positive for future production.
The pricing index continued to expand. Although registering at 73%, it was down 9.1 points from May’s reading.
“Conditions are optimistic but not yet booming for our company, even though many others, it seems, are experiencing growth,” commented one machinery sector participant. “Machinery in support of defense and semiconductor manufacturing is very strong, a bright spot for our team.”
A participant in the transportation equipment sector called out the Section 232 tariffs as continuing “to destroy our profitability and demand as we have to raise prices to deal with this gigantic tax.”
