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Inflation · October 1, 2026 · 2 min read

ISM manufacturing PMI slips to 54.5% in September as prices index rises to 77.9%

By Econ Data Tools Editorial Team

Published October 1, 2026 • Updated October 1, 2026

Reviewed by Independent primary-source verification

ISM's September Manufacturing PMI was 54.5%, 0.1 point below August's 54.6%. The Prices Index rose 6.8 points to 77.9%, while New Orders rose to 55.3% and Production eased to 56.7%.

The Institute for Supply Management reported on October 1, 2026 that its September Manufacturing PMI registered 54.5%, 0.1 percentage point below August's 54.6%. ISM says manufacturing activity expanded for the ninth consecutive month, and the overall economy has been in expansion for 23 months. The PMI is a survey-based diffusion index, so a reading above 50% is not a measure of output in dollars or units. Among the sub-indexes, New Orders registered 55.3%, up 1.6 points from 53.7% in August. Production registered 56.7%, down 1.6 points from 58.3%. The Backlog of Orders Index was 56.4%, up 4.6 points from 51.8%, and the Employment Index was 52.7%, up 1.5 points from 51.2%. The Prices Index registered 77.9%, up 6.8 points from 71.1% in August. ISM says that is close to the 78.3% reading in March, at the start of the Iran war, and marks the 24th straight month of rising raw materials prices. ISM attributes the reading to steel and aluminum prices, tariffs and petroleum-based products tied to the Middle East conflict; higher prices were reported by 58.6% of respondents, up from 46.2% in August. Supplier Deliveries registered 59%, down 0.3 point from 59.3%; for that index only, a reading above 50% means slower deliveries. The Inventories Index fell 2 points to 48.6%, back into contraction. ISM also reports that 40% of respondent comments were positive and 60% negative. Among negative comments, pricing volatility was mentioned in 46%, tariffs in 34%, the Iran war in 30% and longer lead times in 21%; most comments cited several factors. Of the six largest manufacturing industries, five expanded in September. Twelve industries reported growth, and Printing & Related Support Activities and Textile Mills reported contraction. This brief does not forecast Federal Reserve policy or add price drivers beyond those ISM cites. The Prices Index is a diffusion index built from respondent reports, not a measure of the size of price increases.

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