FX.co ★ US Manufacturing Downturn Deepens in May

The ISM Manufacturing PMI in the United States decreased to 48.5 in May 2025, down from 48.7 in April, failing to meet market forecasts of 49.5. This represents the third consecutive month of contraction within the manufacturing sector and signifies the steepest decline since November 2024. Such a trend underscores growing economic uncertainty and persistent cost pressures, partially influenced by the volatile trade policies implemented during the Trump administration. Key measures such as output, new orders, employment, and backlog of orders experienced declines, albeit at a reduced pace, whereas new export sales saw a more significant drop. Additionally, the Inventories Index has now entered contraction territory after previously expanding, largely due to pre-emptive buying ahead of impending tariffs. The Supplier Deliveries Index pointed to continuing delays, indicative of ongoing bottlenecks at ports of entry. While there was a slight easing in tariff-induced price growth, it overall remained at elevated levels.