US manufacturing expanded for the tenth straight month in October 2026, driven by solid domestic demand and robust consumer spending. The Institute for Supply Management reported its Manufacturing PMI rose to 55.5 percent, even as input costs remained elevated.
Institute for Supply Management Reports 55.5 Percent PMI in October 2026
Economic activity across the American manufacturing sector continued its steady climb in October 2026, marking ten consecutive months of growth according to supply executives surveyed by the Institute for Supply Management. Susan Spence, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee, issued the latest figures showing the headline index climbing 1 percentage point above September’s reading of 54.5 percent. The broader economy expanded for the twenty-fourth month in a row.
Activity is drawing strength from robust consumer spending alongside business investments in AI. Government data released prior to the survey showed domestic demand surged at its strongest pace in more than five years during the third quarter, pushing overall annualized economic growth to 3.4 percent.
Production and New Orders Surge Across Core Industries
Factory floors saw acceleration across key operational measures, with new orders creeping up to 55.5 percent from September’s 55.3 percent. Four of the six largest manufacturing sectors reported increased order volumes, led by Machinery; Computer & Electronic Products; Transportation Equipment; and Chemical Products.
The production index registered 59 percent, marking a 2.3 percentage point jump from September and hitting its highest mark since November 2021. Factory employment continued to expand, though the hiring pace cooled slightly. The employment index ticked down to 52.4 percent from 52.7 percent.
Persistent Supply Constraints Keep Factory Gate Inflation Elevated
The supplier deliveries index edged up to 59.1 percent, indicating slower deliveries as suppliers struggle to keep pace with orders.
The Federal Reserve kept its benchmark overnight interest rate in the 3.75 percent to 4.00 percent range while acknowledging that inflation remains elevated,
leaving financial markets anticipating potential borrowing cost adjustments in December.