By Bob Willis

September 5, 2025 - US manufacturing activity contracted in August for a sixth consecutive month, amid falling production in the face of uncertainty linked to trade, fiscal and immigration policy.

The manufacturing purchasing managers' index (PMI) registered 48.7 in August, showing a diminishing pace of contraction compared with the 48 recorded in July, the Institute for Supply Management (ISM) reported Tuesday. Readings under 50 signal contraction; above that level mean expansion.

The six-month-long contraction in manufacturing, which makes up about one-tenth of the US economy, follows two months of expansion preceded by 26 consecutive months of contraction. Services, the largest part of the economy, has remained in expansion through most of that period.

President Donald Trump's aggressive use of tariffs to restructure the global trading order has upended supply chains, prompting executives, investors and consumers to rethink long-term decisions. With hiring falling off sharply and GDP growth dropping, economists are increasingly warning of rising recession risks.

The new orders index rose to 51.4 in August, up from 47.1 recorded in July and the first month of growth in six months.

The production index fell to 47.8 in August, slipping into contraction after growth at 51.4 the prior month.

The prices index was 63.7 in August, slowing from 64.8 the prior month.

Employment rose to 43.8, remaining deep in contraction.

The supplier delivery index was up by two points at 51.3, indicating slower deliveries,which is typical as demand increases.

New export orders rose by 1.5 point to 47.6, still in contraction, while the imports index fell by 1.6 point to 46, deepening their contraction.