Meet&CoTEMPE, Ariz. – U.S. manufacturing activity registered a second consecutive month of expansion in February, albeit at a reduced pace compared to January. This follows 26 consecutive months of contraction. The Institute for Supply Management (ISM) reported a manufacturing index of 50.3, a 0.6-point decline from the prior month, with figures above 50 signaling growth.
Timothy R. Fiore, ISM Chair, noted that demand softened, production stabilized, and workforce reductions persisted amid early disruptions linked to newly announced tariff policies. Rising commodity prices—up approximately 20% pre-implementation—contributed to order backlogs, supply delays, and inventory adjustments. New orders contracted, while backlogs remained subdued but improved marginally. Customer inventories were deemed insufficient, and employment levels reentered contractionary territory. Production saw modest expansion, though manufacturers exercised caution due to economic uncertainties.
Among 18 tracked industries, 10 reported growth, three remained unchanged, and five declined, with furniture manufacturing experiencing the sharpest downturn. The furniture sector faced reduced orders, employment cuts, stable production, and elevated raw material costs—a reversal from years of declining prices.
Despite near-term challenges, 17 industries expressed optimism for 2025, forecasting average revenue growth of 4.2%.
