ISM® REPORTS ECONOMIC IMPROVEMENT TO CONTINUE IN 2026

Manufacturing Progress Anticipated in 2026; Income to Improve 4.4%; Capital Expenditures to Improve 3%; Capability Utilization At present at 82.4%; Providers Progress Projected in 2026; Income to Improve 4.6%; Capital Expenditures to Improve 2.5%; Capability Utilization At present at 90.2%

TEMPE, Ariz., Dec. 16, 2025 /PRNewswire/ — Financial enchancment in the US will proceed in 2026, say the nation’s buying and provide administration executives within the December 2025 ISM Provide Chain Planning Forecast, previously often known as the Semiannual Financial Forecast. Revenues are anticipated to extend in 16 of 18 manufacturing industries and 16 of 18 services-sector industries. Capital expenditures are anticipated to extend by 3 % within the manufacturing sector (after a 3.5-percent improve in 2025) and improve by 2.5 % within the companies sector (after a 3.9-percent improve in 2025). In 2026, employment is anticipated to develop by 0.4 share level in manufacturing and a pair of.5 % in companies. After projected development in manufacturing and companies within the first half (H1) of the yr, development within the second half (H2) is projected to speed up in manufacturing and barely lower momentum within the companies sector.

These projections are a part of the forecast issued by Institute for Provide Administration^®‘s (ISM^®) Enterprise Survey panelists. The forecast was launched in the present day by Susan Spence, MBA, Chair of the ISM Manufacturing Enterprise Survey Committee, and by Steve Miller, CPSM, CSCP, Chair of the ISM Providers Enterprise Survey Committee.

Manufacturing Abstract
Expectations for 2026 are optimistic, as 56 % of survey respondents count on revenues to be larger in 2026 than in 2025. The panel of buying and provide executives expects a 4.4-percent internet improve in general revenues for 2026, in comparison with a 2.5 share level improve reported for 2025. Sixteen of the 18 manufacturing industries count on income enchancment in 2026, listed so as of largest to smallest projected improve: Meals, Beverage & Tobacco Merchandise; Fabricated Steel Merchandise; Miscellaneous Manufacturing; Pc & Digital Merchandise; Chemical Merchandise; Petroleum & Coal Merchandise; Nonmetallic Mineral Merchandise; Transportation Gear; Major Metals; Equipment; Paper Merchandise; Furnishings & Associated Merchandise; Wooden Merchandise; Textile Mills; Plastics & Rubber Merchandise; and Electrical Gear, Home equipment & Parts.

“Manufacturing’s buying and provide executives count on to see general development in 2026. They’re optimistic about general enterprise prospects for the primary half of 2026 and extra enthusiastic about sooner development within the second half. Based on the ISM^® PMI^® Reviews, manufacturing was in contraction for the ninth month in a row in November. Respondents proceed to count on uncooked supplies pricing strain in 2026 and see first-half 2025 revenue margins bettering over the second half of 2025. Producers additionally predict development in exports whereas imports keep the identical in 2026,” says Spence.

Within the manufacturing sector, respondents report the businesses working at 82.4 % of regular capability, up 3.2 share from the 79.2 % reported in Might 2025. Buying and provide executives predict that capital expenditures will improve yr over yr by 3 % in 2026, in comparison with a 3.5-percent improve reported for 2025. Producers count on employment within the sector to develop by 0.4 share level in 2026 relative to December 2025 ranges, whereas labor and profit prices are anticipated to extend a mean of two.5 %. Respondents additionally count on the U.S. greenback to strengthen towards two of the currencies of seven main buying and selling companions in 2026.

The Enterprise Survey Panel predicts that costs paid for uncooked supplies will improve 5.4 % throughout the first 5 months of the yr, with an general improve of 4.4 % for 2026. This compares favorably to a reported 5.4-percent improve in uncooked supplies costs in 2025.

Providers Abstract
Fifty-four % of companies provide administration executives count on their 2026 revenues to be larger than in 2025. They count on a 4.6-percent internet improve in general revenues for 2026, in comparison with a 4.2-percent improve reported for 2025. The 16 industries anticipating income will increase in 2026 — listed so as of largest to smallest projected improve — are: Actual Property, Rental & Leasing; Data; Skilled, Scientific & Technical Providers; Wholesale Commerce; Well being Care & Social Help; Lodging & Meals Providers; Different Providers; Finance & Insurance coverage; Arts, Leisure & Recreation; Retail Commerce; Public Administration; Transportation & Warehousing; Utilities; Mining; Building; and Academic Providers.

“Providers provide executives report working at 90.2 % of regular capability, greater than the 86.5 % reported in Might 2025. They’re optimistic concerning the first half of 2026 and count on development to barely decline within the second half, with a projected improve in capital funding. They forecast that their capability to provide merchandise and supply companies will rise by 2.1 % throughout 2026, and capital expenditures will improve by 2.5 %. Providers Enterprise Survey Panel members additionally predict their general employment will improve by 2.5 % throughout 2026,” says Miller.

Respondents count on the costs they pay for supplies and companies to extend by 4.2 % throughout 2026. Additionally they forecast that their general labor and profit prices will improve 3.2 %. Revenue margins decreased barely within the second and third quarters of 2025, however respondents count on development between now and Might 2026.

OPERATING RATE

Manufacturing
Manufacturing buying and provide executives report their corporations are presently working at 82.4 % of regular capability. This is a rise of three.2 share factors when in comparison with Might 2025 (79.2 %) and a rise when in comparison with December 2024 (82.3 %). The next seven industries — listed so as — are working at or above the typical fee of 82.4 %: Petroleum & Coal Merchandise; Meals, Beverage & Tobacco Merchandise; Wooden Merchandise; Paper Merchandise; Printing & Associated Assist Actions; Pc & Digital Merchandise; and Transportation Gear.

Providers
Providers provide executives report their organizations are presently working at 90.2 % of regular capability. This is a rise to the 86.5 % reported in Might 2025, and likewise above what was reported in December 2024 (87.4 %). The eight industries working at or above the typical capability degree of 90.2 % — listed so as — are: Academic Providers; Actual Property, Rental & Leasing; Arts, Leisure & Recreation; Finance & Insurance coverage; Agriculture, Forestry, Fishing & Looking; Different Providers; Utilities; and Well being Care & Social Help.

PRODUCTION CAPACITY

Manufacturing
Manufacturing capability in manufacturing elevated 2.8 % in 2025, as 33 % of buying and provide executives reported a mean capability improve of 12.7 %, 15 % reported a mean lower of 8.8 %, and 52 % reported no change. This compares to a Might 2025 predicted improve in manufacturing capability of 1.8 % for 2025. Expectations for 2026 are for a rise of 5.2 %. The 14 industries that count on a rise in manufacturing capability in 2026 — listed so as — are: Wooden Merchandise; Major Metals; Miscellaneous Manufacturing; Fabricated Steel Merchandise; Plastics & Rubber Merchandise; Chemical Merchandise; Equipment; Transportation Gear; Meals, Beverage & Tobacco Merchandise; Pc & Digital Merchandise; Electrical Gear, Home equipment & Parts; Furnishings & Associated Merchandise; Paper Merchandise; and Petroleum & Coal Merchandise.

The principal technique of reaching will increase in manufacturing capability in 2025 had been (so as of significance):

1)     Further personnel (everlasting, short-term or contract)
2)     Further plant and/or tools
3)     Extra hours labored with present personnel
4)     Changed tools with technically superior tools

Providers
The capability to provide merchandise or present companies within the companies sector elevated 3 % throughout 2025. That is larger than what was predicted in Might 2025 (-1.1 %), and 0.7 share level decrease than the two.8 % predicted for the yr in December 2024. For 2026, 21 % of companies provide managers count on will increase averaging 11.1 %, and 5 % of respondents count on decreases averaging 4.9 %. Seventy-three % count on no change in capability. The 12 industries anticipating will increase in capability in 2026 — listed so as — are: Skilled, Scientific & Technical Providers; Data; Building; Wholesale Commerce; Utilities; Well being Care & Social Help; Administration of Firms & Assist Providers; Transportation & Warehousing; Lodging & Meals Providers; Finance & Insurance coverage; Retail Commerce; and Academic Providers.

The principal technique of reaching will increase in manufacturing or provision capability in 2025 had been (so as of significance):

1)     Extra hours labored with present personnel
2)     Further personnel (everlasting, short-term or contract)
3)     Further plant and/or tools
4)     Extra shifts labored with present personnel

CAPITAL EXPENDITURES — 2025 vs. 2024

Manufacturing
Buying and provide executives report 2025 capital expenditures elevated 3.5 % on common when in comparison with 2024 ranges. Expenditures for 2025 beat survey respondents’ earlier expectations, as they predicted an lower of 1.3 share factors for the yr in Might 2025. The 31 % of purchasers who reported elevated capital expenditures in 2025 indicated a mean improve of 31.2 %, whereas the 25 % who mentioned their capital spending was lowered reported a mean lower of 25.4 %. Forty-four % of respondents mentioned their spend ranges had been unchanged in 2025. The 13 industries displaying will increase in capital expenditures for 2025 — listed so as of share improve — are: Nonmetallic Mineral Merchandise; Attire, Leather-based & Allied Merchandise; Paper Merchandise; Electrical Gear, Home equipment & Parts; Major Metals; Meals, Beverage & Tobacco Merchandise; Wooden Merchandise; Pc & Digital Merchandise; Plastics & Rubber Merchandise; Miscellaneous Manufacturing; Chemical Merchandise; Petroleum & Coal Merchandise; and Furnishings & Associated Merchandise.

Providers
Providers provide administration executives report their degree of capital expenditures in 2025 elevated 3.9 % yr over yr. That is larger than the two.8 % improve reported for 2024 and better than the three.3-percent lower predicted by respondents in Might 2025. Thirty-seven % report will increase averaging 15.4 %, whereas 10 % report decreases averaging 17.2 %. Fifty-three % point out they spent the identical on capital expenditures in 2025 as in 2024. The 14 industries experiencing will increase in capital expenditures in 2025 — listed so as of share improve — are: Academic Providers; Well being Care & Social Help; Public Administration; Utilities; Wholesale Commerce; Data; Retail Commerce; Transportation & Warehousing; Arts, Leisure & Recreation; Mining; Actual Property, Rental & Leasing; Lodging & Meals Providers; Building; and Finance & Insurance coverage.

PREDICTED CAPITAL EXPENDITURES — 2026 vs. 2025

Manufacturing
Buying and provide executives count on capital expenditures to extend 3 % in 2026. The 32 % of respondents predicting elevated capital expenditures in 2026 point out a mean improve of 26.1 %, whereas the 22 % who mentioned their capital spending can be lowered predict a mean lower of 23.2 %. The remaining 46 % mentioned they count on to spend the identical in 2026 as in 2025. The eight industries predicting will increase in capital expenditures for 2026 — within the following order — are: Major Metals; Furnishings & Associated Merchandise; Petroleum & Coal Merchandise; Attire, Leather-based & Allied Merchandise; Chemical Merchandise; Fabricated Steel Merchandise; Transportation Gear; and Equipment.

Providers
Providers buying and provide executives expect a rise of two.5 % in capital expenditures in 2026, decrease than the three.9 % improve reported for 2025. The 37 % of respondents anticipating to spend extra on capital expenditures predict a mean improve of 12.7 %. A further 12 % anticipate a lower averaging 17.2 %. Fifty-one % count on to spend the identical on capital expenditures in 2026. The 15 industries anticipating will increase in capital expenditures in 2026 — listed so as of share improve — are: Retail Commerce; Utilities; Wholesale Commerce; Academic Providers; Lodging & Meals Providers; Different Providers; Mining; Well being Care & Social Help; Arts, Leisure & Recreation; Data; Administration of Firms & Assist Providers; Actual Property, Rental & Leasing; Skilled, Scientific & Technical Providers; Building; and Finance & Insurance coverage.

PRICES — Adjustments Between Finish of 2025 and Finish of 2024

Manufacturing
After a Might 2025 forecast of a 7.5-percent improve in costs paid for uncooked supplies in 2025, survey respondents report worth will increase averaging 5.4 % for the yr. The 71 % who say their costs are larger now than on the finish of 2024 report a mean improve of 8.9 %, whereas the ten % who report decrease costs point out a mean lower of 9.5 %. The remaining 19 % report no change in 2025. The 11 industries experiencing worth will increase above the typical of 5.4 % in 2025 — listed so as — are: Electrical Gear, Home equipment & Parts; Attire, Leather-based & Allied Merchandise; Wooden Merchandise; Equipment; Textile Mills; Nonmetallic Mineral Merchandise; Pc & Digital Merchandise; Fabricated Steel Merchandise; Major Metals; Paper Merchandise; and Miscellaneous Manufacturing.

Providers
In 2025, companies provide executives report, costs paid elevated by 3.6 %. That is lower than the 7.3-percent improve they predicted in Might 2025 and fewer than the 5.3-percent improve for 2025 predicted one yr in the past. Sixty-one % of respondents report worth will increase averaging 6.2 %. Three % point out decreased costs, with a mean discount of 6.1 %, and 36 % of respondents didn’t expertise worth adjustments this yr. The ten industries experiencing worth will increase above the typical of three.6 % in 2025 — listed so as — are: Agriculture, Forestry, Fishing & Looking; Utilities; Administration of Firms & Assist Providers; Wholesale Commerce; Building; Well being Care & Social Help; Skilled, Scientific & Technical Providers; Data; Retail Commerce; and Public Administration.

PRICES – Predicted Adjustments Between Might 2026 and Finish of 2025

Manufacturing
Sixty-nine % of buying and provide executives count on the costs they pay to extend within the first 5 months of 2026 by a mean of 8.4 %, whereas eight % anticipate decreases averaging 4.4 share factors. Together with the 23 % who count on no change in costs, respondents count on a internet common general worth improve of 5.4 share factors earlier than the top of Might. The seven industries predicting a mean improve in costs paid of 5.4 % or larger within the first 5 months of 2026 — listed so as — are: Petroleum & Coal Merchandise; Fabricated Steel Merchandise; Pc & Digital Merchandise; Textile Mills; Electrical Gear, Home equipment & Parts; Nonmetallic Mineral Merchandise; and Transportation Gear.

Providers
Providers survey respondents predict purchases within the first 5 months of 2026 will value a mean of three.8 % greater than on the finish of 2025. That is greater than the rise reported for calendar yr 2025. Sixty-four % of companies respondents predict the costs they pay will improve a mean of 6 % earlier than the top of Might, 2 % of respondents count on worth decreases averaging 6.3 %, and the remaining 34 % predict no change in costs. The 11 industries predicting common worth will increase of at the very least 3.8 % within the first 5 months of 2026 — listed so as of share improve — are: Agriculture, Forestry, Fishing & Looking; Well being Care & Social Help; Transportation & Warehousing; Skilled, Scientific & Technical Providers; Public Administration; Arts, Leisure & Recreation; Lodging & Meals Providers; Utilities; Administration of Firms & Assist Providers; Wholesale Commerce; and Academic Providers.

PRICES — Predicted Adjustments Between Finish of 2026 and Finish of 2025

Manufacturing
Respondents predict a internet common improve in costs paid of 4.4 % between December 2025 and December 2026. Sixty-six % of respondents count on a mean worth improve of seven.6 % in 2026, whereas eight % count on a mean discount of 8.2 %. The remaining 26 % count on no change of their common costs paid for the yr. The 9 industries anticipating worth will increase above the anticipated common of 4.4 % by the top of 2026 — listed so as — are: Electrical Gear, Home equipment & Parts; Wooden Merchandise; Equipment; Chemical Merchandise; Fabricated Steel Merchandise; Pc & Digital Merchandise; Major Metals; Textile Mills; and Furnishings & Associated Merchandise.

Providers
For all of 2026, companies provide administration executives count on their costs to extend a mean of 4.2 %. Sixty-5 % of respondents count on will increase averaging 6.7 %, 1 % anticipate costs to drop a mean of 8 %, and 34 % foresee no change in costs subsequent yr. The 11 industries anticipating larger than the 4.2-percent common worth improve by the top of 2026 — listed so as of share improve — are: Administration of Firms & Assist Providers; Transportation & Warehousing; Lodging & Meals Providers; Different Providers; Well being Care & Social Help; Utilities; Skilled, Scientific & Technical Providers; Arts, Leisure & Recreation; Public Administration; Data; and Wholesale Commerce.

LABOR AND BENEFIT COSTS — Predicted Charge Change Finish of 2026 vs. Finish of 2025

Manufacturing
Buying and provide executives count on larger general labor and profit prices for 2026. Fifty-nine % of respondents count on labor and profit prices to develop by a mean of 4.8 % for all of 2026, whereas the 4 % forecasting decrease prices mission a mean lower of 8.2 %. Together with the 37 % of respondents who consider prices will stay the identical, the general internet fee of improve is anticipated to be 2.5 % for the yr. The 11 industries anticipating to pay a rise of two.5 % or larger — listed so as — are: Wooden Merchandise; Major Metals; Furnishings & Associated Merchandise; Electrical Gear, Home equipment & Parts; Petroleum & Coal Merchandise; Fabricated Steel Merchandise; Paper Merchandise; Miscellaneous Manufacturing; Textile Mills; Nonmetallic Mineral Merchandise; and Pc & Digital Merchandise.

Providers
Providers buying and provide executives count on a 3.2-percent improve in labor and profit prices in 2026. Sixty-six % of respondents count on such prices to extend by a mean of 5.2 %. One other 3 % of respondents count on labor and profit prices to shrink by a mean of 9 %, and 31 % consider prices will stay secure throughout 2026. The 5 industries anticipating to pay a rise of three.2 % or larger are: Actual Property, Rental & Leasing; Skilled, Scientific & Technical Providers; Agriculture, Forestry, Fishing & Looking; Data; and Arts, Leisure & Recreation.

EMPLOYMENT — Change in Total Employment

Manufacturing
ISM’s Manufacturing panelists report that sector employment decreased 0.4 share level in 2025 and forecast that employment will improve by the identical 0.4 share level, on common, for the total yr of 2026. Twenty-seven % of respondents count on employment to be, on common, 6.7 % larger in 2026, whereas 20 % predict employment to be decrease by a mean of 6.8 %. The remaining 53 % of respondents count on their employment ranges to be unchanged in 2026. The eight industries predicting will increase in employment in 2026 — listed so as — are: Major Metals; Paper Merchandise; Meals, Beverage & Tobacco Merchandise; Miscellaneous Manufacturing; Equipment; Fabricated Steel Merchandise; Transportation Gear; and Furnishings & Associated Merchandise.

Providers
ISM’s Providers panelists report that sector employment was up 0.1 % for all of 2025. They forecast that employment will improve 2.5 % by the top of 2026. Within the coming yr, 40 % of respondents count on larger ranges of employment (up 8 % on common), 13 % anticipate decrease ranges (down 4.8 % on common), and 47 % count on their employment ranges to be unchanged. The 13 industries anticipating will increase in employment in 2026 — listed so as — are: Actual Property, Rental & Leasing; Data; Skilled, Scientific & Technical Providers; Retail Commerce; Wholesale Commerce; Well being Care & Social Help; Lodging & Meals Providers; Arts, Leisure & Recreation; Building; Transportation & Warehousing; Utilities; Mining; and Academic Providers.

EXPORT BUSINESS — Predicted Change for Subsequent Half 12 months (First Half of 2026)

Manufacturing
Survey responses point out executives count on will increase in new export orders for the primary half of 2026. Of the 77 % of respondents who indicated their corporations monitor export exercise, 35 % predict a rise (33 % average and a pair of % substantial) over the subsequent six months. Nineteen % of respondents predict a lower (17 % average and a pair of % substantial) of their exports, and 46 % anticipate no change in exports over the subsequent six months. The eight industries anticipating development in exports throughout the first half of 2026 — listed so as — are: Printing & Associated Assist Actions; Major Metals; Transportation Gear; Chemical Merchandise; Pc & Digital Merchandise; Electrical Gear, Home equipment & Parts; Miscellaneous Manufacturing; and Meals, Beverage & Tobacco Merchandise.

Providers
For the primary half of 2026, respondents whose organizations present companies exterior the U.S. are optimistic regarding enterprise. Of the 21 % of Providers respondents who report that their corporations measure exports, 23 % predict a rise (19 % average and 4 % substantial) over the subsequent six months. Eight % of respondents count on a lower in exports (8 % average and 0 % substantial), and 69 % anticipate no change in exports over the subsequent six months. Of the industries that monitor exports, the three that count on development within the first half of 2026 are: Retail Commerce; Administration of Firms & Assist Providers; and Utilities.

IMPORT BUSINESS — Predicted Change for Subsequent Half 12 months (First Half of 2026)

Manufacturing
Respondents count on no change in imports within the first half of 2026. Of the 88 % of purchasers who reported that their corporations import supplies, 28 % predict a rise over the subsequent six months (27 % average and 1 % substantial), whereas 29 % predict a lower (26 % average and three % substantial). The remaining 43 % of survey respondents count on no change in imports within the first half of 2026. The 5 industries anticipating development in imports are: Plastics & Rubber Merchandise; Chemical Merchandise; Meals, Beverage & Tobacco Merchandise; Transportation Gear; and Fabricated Steel Merchandise.

Providers
Providers executives’ expectations for import exercise for the primary half of 2026 have decreased in comparison with their expectations in December 2024 for the primary half of 2025. Of the 43 % of companies respondents who report their organizations import supplies and companies, 18 % (16 % average and a pair of % substantial) predict a rise throughout the first half of 2026. Twenty % of respondents (19 % average and 1 % substantial) predict a lower. The remaining 62 % count on no change in imports over the subsequent six months. The 5 industries anticipating development in imports — listed so as — are: Retail Commerce; Mining; Transportation & Warehousing; Building; and Administration of Firms & Assist Providers.

INVENTORY-TO-SALES RATIO

Manufacturing
Amongst manufacturing panelist corporations, 16 % anticipate growing their bought inventory-to-sales ratio throughout 2026. A further 23 % count on their ratio to drop, and 61 % forecast no change. The diffusion index of 46.6 % suggests the inventory-to-sales ratio will lower in 2026.

Providers
Seven % of respondents’ corporations mission growing their bought inventory-to-sales ratio throughout 2026. A further 11 % count on their ratio to drop, and 82 % forecast no change. The diffusion index of 47.7 % suggests the inventory-to-sales ratio will lower in 2026.

Be aware: A diffusion index above 50 % would point out a rise within the inventory-to-sales ratio; under 50 %, a lower within the ratio.

U.S. DOLLAR — Predicted Power vs. Main Buying and selling Currencies — in 2026 — Manufacturing Solely

Manufacturing
Buying and provide executives expect the U.S. greenback will typically strengthen in 2026 towards two of the foreign currency echange listed under. The typical diffusion index for this forecast is 48.8 %, a lower of 14 share factors in comparison with the December 2024 forecast common of 62.8 % for 2025.

Be aware: A diffusion index above 50 % would predict a typically stronger U.S. greenback; under 50 %, a typically weaker U.S. greenback, with the space from 50 % indicative of the anticipated energy or weak spot.

BUSINESS REVENUES

Enterprise Revenues Comparability — 2025 vs. 2024

Manufacturing
Total, revenues elevated for producers. Forty-four % of respondents say the businesses’ revenues had been higher than in 2024, growing on common 12.1 %. Twenty-seven % say revenues decreased in 2025 by a mean of 10.2 %, and the remaining 29 % point out no change. Total, buying and provide executives point out a internet improve of two.5 share factors in enterprise revenues for 2025 over 2024. That is greater than the 0.1-percentage level improve that was forecast in Might 2025 for all of 2025 and fewer than the 4.2-percent improve predicted in December 2024. The eight industries reporting will increase in revenues in 2025 — listed so as — are: Transportation Gear; Petroleum & Coal Merchandise; Meals, Beverage & Tobacco Merchandise; Major Metals; Wooden Merchandise; Miscellaneous Manufacturing; Pc & Digital Merchandise; and Nonmetallic Mineral Merchandise.

Providers
Providers provide administration executives report that enterprise revenues for 2025 elevated yr over yr by 4.2 %. That is greater than the flat (0-percent) predicted for the yr in Might 2025. The 55 % of respondents reporting higher enterprise revenues in 2025 than in 2024 estimate a mean income improve of 9.3 %. This equals the typical lower of 9.3 % reported by the 9 % of respondents who report worse enterprise in 2025. The remaining 36 % have skilled no change in 2025. The 15 industries reporting will increase in revenues in 2025 — within the following order — are: Actual Property, Rental & Leasing; Data; Transportation & Warehousing; Skilled, Scientific & Technical Providers; Well being Care & Social Help; Building; Lodging & Meals Providers; Finance & Insurance coverage; Arts, Leisure & Recreation; Utilities; Retail Commerce; Different Providers; Public Administration; Wholesale Commerce; and Mining.

Enterprise Revenues Prediction for 2026

Manufacturing
Manufacturing survey respondents forecast that enterprise revenues for 2026 will likely be stronger than in 2025. The 56 % of respondents forecasting higher organizational enterprise revenues in 2026 estimate a mean improve of 8.9 %. This contrasts with a mean lower of 8.1 % forecast by the 8 % who predict decrease enterprise revenues in 2026. Together with the 36 % who see no change in 2026, the forecast for general internet improve in enterprise revenues for 2026 is 4.4 %. Sixteen of the 18 manufacturing industries count on income enchancment in 2026, listed so as of largest to smallest projected improve: Meals, Beverage & Tobacco Merchandise; Fabricated Steel Merchandise; Miscellaneous Manufacturing; Pc & Digital Merchandise; Chemical Merchandise; Petroleum & Coal Merchandise; Nonmetallic Mineral Merchandise; Transportation Gear; Major Metals; Equipment; Paper Merchandise; Furnishings & Associated Merchandise; Wooden Merchandise; Textile Mills; Plastics & Rubber Merchandise; and Electrical Gear, Home equipment & Parts.

Providers
Providers survey respondents forecast that their corporations’ enterprise revenues for 2026 will enhance by a mean of 4.6 %. That is barely greater than the 4.2-percent improve reported for 2025 and greater than the three.9-percent improve predicted one yr in the past for 2025 revenues. The 54 % of respondents forecasting higher enterprise in 2026 estimate a mean income improve of 10.1 %. The ten % who predict worse enterprise in 2026 count on a lower of 9.9 %. The remaining 36 % see no change. The 16 industries anticipating income will increase in 2026 — listed so as of largest to smallest projected improve — are: Actual Property, Rental & Leasing; Data; Skilled, Scientific & Technical Providers; Wholesale Commerce; Well being Care & Social Help; Lodging & Meals Providers; Different Providers; Finance & Insurance coverage; Arts, Leisure & Recreation; Retail Commerce; Public Administration; Transportation & Warehousing; Utilities; Mining; Building; and Academic Providers.

PROFIT MARGINS

Manufacturing
Survey respondents report that revenue margins decreased on common throughout the second and third quarters of 2025. Twenty-four % of respondents’ corporations skilled a rise, 38 % had decrease margins, and 38 % reported no change. Expectations are larger between now and Might 2026, as 33 % of respondents forecast higher revenue margins, 22 % predict decrease revenue margins, and 45 % predict no change. The eight industries anticipating a rise in revenue margins by way of Might 2026 — listed so as of share improve — are: Attire, Leather-based & Allied Merchandise; Major Metals; Petroleum & Coal Merchandise; Pc & Digital Merchandise; Electrical Gear, Home equipment & Parts; Transportation Gear; Meals, Beverage & Tobacco Merchandise; and Equipment.

Providers
Amongst companies provide administration executives, 19 % indicated their organizations skilled a rise in revenue margins throughout the second and third quarters of 2025, 21 % discovered smaller revenue margins, and 60 % had no change in margins throughout that timeframe. From now by way of Might 2026, 34 % of provide managers count on improved revenue margins, 21 % count on decrease revenue margins, and the remaining 45 % of respondents anticipate no change. The 9 industries anticipating a rise in revenue margins by way of Might 2026 are, within the following order: Actual Property, Rental & Leasing; Lodging & Meals Providers; Different Providers; Wholesale Commerce; Administration of Firms & Assist Providers; Building; Data; Well being Care & Social Help; and Utilities.

BUSINESS COMPARISON

The First Half of 2026 In contrast with the Final Half of 2025

Manufacturing
Manufacturing survey respondents are optimistic concerning the subsequent six months, as mirrored within the diffusion index studying of 56.9 %. Evaluating their outlook for the primary half of 2026 to the final half of 2025, 35 % predict it will likely be higher, 21 % predict it will likely be worse, and 44 % count on no change. The 13 industries anticipating enchancment within the first half of 2026 — listed so as — are: Major Metals; Fabricated Steel Merchandise; Meals, Beverage & Tobacco Merchandise; Wooden Merchandise; Paper Merchandise; Furnishings & Associated Merchandise; Miscellaneous Manufacturing; Plastics & Rubber Merchandise; Electrical Gear, Home equipment & Parts; Chemical Merchandise; Pc & Digital Merchandise; Transportation Gear; and Equipment.

Providers
Providers buying and provide executives really feel optimistic concerning the first half of 2026. The diffusion index indicating present expectations registered 65.9 %. Forty-five % of respondents count on the primary half of subsequent yr to be higher than the final half of 2025. Twelve % anticipate it will likely be worse, and 43 % predict no change. The 13 industries anticipating enchancment within the first half of 2026 — listed so as — are: Actual Property, Rental & Leasing; Wholesale Commerce; Retail Commerce; Lodging & Meals Providers; Well being Care & Social Help; Building; Skilled, Scientific & Technical Providers; Different Providers; Academic Providers; Data; Administration of Firms & Assist Providers; Utilities; and Finance & Insurance coverage.

Be aware: A diffusion index above 50 % would typically point out an expectation of the primary half of the approaching yr being higher than the second half of the present yr.

The Second Half of 2026 In contrast with the First Half of 2026

Manufacturing
Buying and provide executives in manufacturing are much more optimistic concerning the second half of 2026 in comparison with the primary half. The share of survey respondents who forecast the second half of 2026 to be higher than the primary half is 48 %, whereas 9 % count on it to be worse, and 43 % count on no change. The diffusion index determine for the second half of 2026 is 69.6 %, in comparison with 56.9 % for the primary half of 2026. The 13 industries predicting enchancment within the second half of 2026 — listed so as — are: Meals, Beverage & Tobacco Merchandise; Paper Merchandise; Furnishings & Associated Merchandise; Transportation Gear; Equipment; Miscellaneous Manufacturing; Pc & Digital Merchandise; Fabricated Steel Merchandise; Electrical Gear, Home equipment & Parts; Textile Mills; Wooden Merchandise; Chemical Merchandise; and Plastics & Rubber Merchandise.

Providers
Providers buying and provide executives really feel barely much less optimistic concerning the second half of 2026 as in comparison with the primary half of the yr. (The diffusion index studying for the second half is 65.3 %; it’s 65.9 % for the primary half.) The share of respondents who presently forecast the second half of 2026 to be higher than the primary half is 37 %, whereas 7 % count on it to be worse. A further 56 % of purchasers count on no change. The 12 industries anticipating enchancment within the second half of 2026 — listed so as — are: Lodging & Meals Providers; Building; Data; Mining; Retail Commerce; Actual Property, Rental & Leasing; Well being Care & Social Help; Wholesale Commerce; Finance & Insurance coverage; Administration of Firms & Assist Providers; Skilled, Scientific & Technical Providers; and Utilities.

Be aware: A diffusion index above 50 % would typically point out an expectation of the second half of the approaching yr being higher than the primary half.

OUTLOOK FOR THE NEXT 12 MONTHS

Manufacturing
In comparison with the outlook for 2025 reported in December 2024, survey respondents this yr are much less optimistic concerning the outlook for 2026. Forty-four % of respondents consider 2026 will likely be higher than 2025. Thirty-seven % of respondents consider 2026 would be the similar as 2025, and 19 % consider 2026 will likely be worse than 2025. The ensuing diffusion index for the 2026 outlook is 62.4 %, in contrast with 63.5 % for 2025.

Providers
Providers survey respondents are barely much less optimistic in comparison with their predictions for 2025. The identical proportion of respondents this yr consider 2026 will likely be higher than 2025. That is countered by a improve within the proportion of respondents indicating that 2026 will likely be worse. The diffusion index for the 2026 outlook of 60.8 % is decrease than the diffusion index going into 2025 (63.7 %).

SPECIAL QUESTION TOPIC #1: ARTIFICIAL INTELLIGENCE APPLICATIONS USED

We requested the Enterprise Survey panelists, “My provide chain group makes use of the next AI functions:”

Respondents indicated:

SPECIAL QUESTION TOPIC #2: NEW AI RELATED ROLES

We requested, “Has your group created any new AI-related roles?”

Respondents indicated:

SPECIAL QUESTION TOPIC #3: AI CHANGE TO THE QUALITY OF WORK

We requested, “How has the standard of labor (lack of errors) modified with AI use?”

Respondents indicated:

SPECIAL QUESTION TOPIC #4: EFFECT OF OBBBA ACT ON CAPITAL EXPENDITURES

We requested, “What impact, if any, have the total expensing provisions within the “One Huge Stunning Invoice Act (OBBBA)” had or are anticipated to have in your group’s capital expenditure actions and plans?”

Respondents indicated:

SPECIAL QUESTION TOPIC #5: PRICE CHANGE IN RESPONSE TO TARIFFS

We requested, “How do you propose to vary your promoting costs for services or products in response to tariffs?”

Respondents indicated:

SPECIAL QUESTION TOPIC #6: TIMING OF TARIFFS IN ORDER TO RAISE PRICES

We requested, “How lengthy will tariffs must be in place for services or products impacted by tariffs earlier than you elevate your costs?”

Respondents indicated:

SPECIAL QUESTION TOPIC #7: OTHER STRATEGIES IN RESPONSE TO TRADE POLICIES

We requested, “Moreover elevating costs, what different methods are you implementing in response to latest or anticipated adjustments in commerce insurance policies?”

Respondents indicated:

SPECIAL QUESTION TOPIC #8: RESHORING PLANS

We requested, “Within the subsequent six months, does your group plan to reshore last or intermediate manufacturing from overseas?”

Respondents indicated:

SUMMARY

Manufacturing
The manufacturing sector contracted in November for the ninth consecutive month, and the forecast signifies this development could reverse within the first half of 2026 with continued strengthening within the second half.

• Working fee is presently at 82.4 %.
• Manufacturing capability elevated by 2.8 % in 2025.
• Manufacturing capability is anticipated to extend by 5.2 % in 2026.
• Capital expenditures elevated 3.5 % in 2025.
• Capital expenditures are anticipated to extend 3 % in 2026.
• Costs paid elevated 5.4 % in 2025.
• Total, 2026 costs paid are anticipated to extend 4.4 %.
• Labor and profit prices are anticipated to extend 2.5 % in 2026.
• Manufacturing employment is predicted to extend 0.4 share level in 2026.
• U.S. exports development anticipated in 2026.
• U.S. imports anticipated to remain the identical in 2026.
• The U.S. greenback is anticipated to strengthen in two of the seven main buying and selling companions in 2026.
• Manufacturing revenues elevated 2.5 % in 2025.
• Manufacturing revenues are anticipated to extend 4.4 % in 2026.
• Manufacturing provide managers have a optimistic outlook, with 44 % of respondents predicting 2026 will likely be higher than 2025, and 19 % of respondents predicting 2026 will likely be worse than 2025.

Providers
The companies sector grew for the second month in a row in November, and the forecast signifies continued enlargement in 2026.

• Working fee is presently at 90.2 %.
• Manufacturing capability elevated 3 % in 2025.
• Manufacturing and provision capability is anticipated to extend 2.1 % in 2026.
• Capital expenditures elevated 3.9 % in 2025.
• Capital expenditures are anticipated to extend 2.5 % in 2026.
• Costs paid elevated 3.6 % in 2025.
• Costs paid are anticipated to extend 4.2 % in 2026.
• Labor and profit prices are anticipated to extend 3.2 % in 2026.
• Employment is anticipated to extend 2.5 % in 2026.
• Export ranges anticipated to extend in 2026.
• Import discount anticipated in 2026.
• Providers revenues are up 4.2 % in 2025.
• Providers revenues are anticipated to rise 4.6 % in 2026.
• Providers provide managers are optimistic of their outlook, with 39 % of respondents predicting 2026 will enhance in comparison with 2025.

*Miscellaneous Manufacturing contains gadgets akin to medical tools and provides, jewellery, sporting items, toys and workplace provides.

**Different Providers embody companies akin to tools and equipment repairing; selling or administering spiritual actions; grant making; advocacy; and offering dry-cleaning and laundry companies, private care companies, demise care companies, pet care companies, photofinishing companies, short-term parking companies, and courting companies.

About This Report
The information introduced herein is obtained from a survey of producing and companies provide executives nationwide throughout November 2025 primarily based on info they’ve collected inside their respective organizations. ISM^® makes no illustration, aside from that acknowledged inside this launch, relating to the person firm knowledge assortment procedures. The information ought to be in comparison with all different financial knowledge sources when utilized in decision-making.

Information and Technique of Presentation
Along with this forecast, the Manufacturing ISM^® PMI^® Report is issued month-to-month and is taken into account by many economists to be probably the most dependable near-term financial barometer obtainable. It’s reviewed often by authorities companies and financial enterprise leaders. The report, compiled from responses to questions requested of buying and provide executives throughout the nation, tracks industrial manufacturing, new orders, inventories, provider deliveries, imports, exports, backlog of orders, employment, prospects’ inventories, shopping for insurance policies and costs. The report has been issued by the affiliation since 1931, besides throughout World Conflict II. The composition of the Manufacturing Enterprise Survey Panel is stratified in keeping with the North American Business Classification System (NAICS) and every of the next NAICS-based trade’s contribution to gross home product (GDP): Meals, Beverage & Tobacco Merchandise; Textile Mills; Attire, Leather-based & Allied Merchandise; Wooden Merchandise; Paper Merchandise; Printing & Associated Assist Actions; Petroleum & Coal Merchandise; Chemical Merchandise; Plastics & Rubber Merchandise; Nonmetallic Mineral Merchandise; Major Metals; Fabricated Steel Merchandise; Equipment; Pc & Digital Merchandise; Electrical Gear, Home equipment & Parts; Transportation Gear; Furnishings & Associated Merchandise; and Miscellaneous Manufacturing (merchandise akin to medical tools and provides, jewellery, sporting items, toys and workplace provides). The information are weighted primarily based on every trade’s contribution to GDP. Based on BEA estimates (the typical of the fourth quarter 2023 GDP estimate and the GDP estimates for first, second, and third quarter 2024, as launched on December 19, 2024), the six largest manufacturing industries are: Chemical Merchandise; Transportation Gear; Pc & Digital Merchandise; Meals, Beverage & Tobacco Merchandise; Equipment; and Petroleum & Coal Merchandise.

Overlaying the companies sector, ISM debuted the Providers ISM^® PMI^® Report in June 1998. The Providers ISM PMI^® Report is launched on the third enterprise day of every month and relies on knowledge obtained from buying and provide executives throughout the nation. The report covers enterprise exercise, new orders, backlog of orders, new export orders, stock change, stock sentiment, imports, costs, employment and provider deliveries. The Providers Enterprise Survey Panel responses are divided into the next NAICS code classes: Agriculture, Forestry, Fishing & Looking; Mining; Utilities; Building; Wholesale Commerce; Retail Commerce; Transportation & Warehousing; Data; Finance & Insurance coverage; Actual Property, Rental & Leasing; Skilled, Scientific & Technical Providers; Administration of Firms & Assist Providers; Academic Providers; Well being Care & Social Help; Arts, Leisure & Recreation; Lodging & Meals Providers; Public Administration; and Different Providers (companies akin to Gear & Equipment Repairing; Selling or Administering Non secular Actions; Grantmaking; Advocacy; and Offering Dry-Cleansing & Laundry Providers, Private Care Providers, Dying Care Providers, Pet Care Providers, Photofinishing Providers, Momentary Parking Providers, and Courting Providers). The information are weighted primarily based on every trade’s contribution to GDP. Based on BEA estimates (the typical of the fourth quarter 2023 GDP estimate and the GDP estimates for first, second, and third quarter 2024, as launched on December 19, 2024), the six largest companies sectors are: Actual Property, Rental & Leasing; Public Administration; Skilled, Scientific & Technical Providers; Well being Care & Social Help; Data; and Finance & Insurance coverage.

The industries reporting development, as indicated within the Manufacturing and Providers ISM^® PMI^® Reviews, and on this Provide Chain Planning Forecast, are listed within the order of most development to least development. For the industries reporting contraction or decreases, these are listed within the order of the best degree of contraction/lower to the least degree of contraction/lower.

ISM ROB Content material
The Institute for Provide Administration^® (“ISM”) PMI^® Reviews (each Manufacturing and Providers) (“ISM PMI”) incorporates info, textual content, recordsdata, pictures, pictures, video, sounds, musical works, works of authorship, functions, and some other supplies or content material (collectively, “Content material”) of ISM (“ISM PMI Content material”). ISM PMI Content material is protected by copyright, trademark, commerce secret, and different legal guidelines, and as between you and ISM, ISM owns and retains all rights within the ISM PMI Content material. ISM hereby grants you a restricted, revocable, nonsublicensable license to entry and show in your particular person system the ISM PMI Content material (excluding any software program code) solely to your private, non-commercial use. The ISM PMI Content material might also include Content material of customers and different ISM licensors. Besides as offered herein or as explicitly allowed in writing by ISM, you might not copy, obtain, stream, seize, reproduce, duplicate, archive, add, modify, translate, publish, broadcast, transmit, retransmit, distribute, carry out, show, promote, or in any other case use any ISM PMI Content material.

Besides as explicitly and expressly permitted by ISM, you’re strictly prohibited from creating works or supplies (together with however not restricted to tables, charts, knowledge streams, timeseries variables, fonts, icons, hyperlink buttons, wallpaper, desktop themes, on-line postcards, montages, mash-ups and comparable movies, greeting playing cards, and unlicensed merchandise) that derive from or are primarily based on the ISM PMI Content material. This prohibition applies no matter whether or not the by-product works or supplies are offered, bartered, or given away. Chances are you’ll not both straight or by way of the usage of any system, software program, web web site, web-based service, or different means take away, alter, bypass, keep away from, intrude with, or circumvent any copyright, trademark, or different proprietary notices marked on the Content material or any digital rights administration mechanism, system, or different content material safety or entry management measure related to the Content material together with geo-filtering mechanisms. With out prior written authorization from ISM, you might not construct a enterprise using the Content material, whether or not or not for revenue.

Chances are you’ll not create, recreate, distribute, incorporate in different work, or promote an index of any portion of the Content material except you obtain prior written authorization from ISM. Requests for permission to breed or distribute ISM PMI Content material may be made by contacting in writing at: ISM Analysis, Institute for Provide Administration, 309 W. Elliot Street, Suite 113, Tempe, AZ 85284, or by emailing [email protected], Topic: Content material Request.

ISM shall not have any legal responsibility, responsibility, or obligation for or referring to the ISM PMI Content material or different info contained herein, any errors, inaccuracies, omissions or delays in offering any ISM PMI Content material, or for any actions taken in reliance thereon. In no occasion shall ISM be accountable for any particular, incidental, or consequential damages arising out of the usage of the ISM PMI. Manufacturing PMI^® and Providers PMI^® are registered emblems of Institute for Provide Administration^®. Institute for Provide Administration^® and ISM^® are registered emblems of Institute for Provide Administration, Inc.

About Institute for Provide Administration^®
Institute for Provide Administration^® (ISM^®) is the primary and main not-for-profit skilled provide administration group worldwide. Its group of greater than 50,000 in additional than 100 international locations manages about US$1 trillion in company and authorities provide chain procurement yearly. Based in 1915 by practitioners, ISM is dedicated to advancing the apply of provide administration to drive worth and aggressive benefit for its members, contributing to a affluent and sustainable world. ISM empowers and leads the career by way of the ISM^® PMI^® Reviews, its extremely regarded certification and coaching applications, company companies, occasions and assessments. The ISM^® PMI^® Reviews, Manufacturing, and Providers are two of probably the most dependable financial indicators obtainable, offering steerage to provide administration professionals, economists, analysts, and authorities and enterprise leaders. For extra info, please go to: www.ismworld.org.

The total textual content model of every report is posted on ISM’s House Web page at www.ismworld.org on the primary and third enterprise days* of each month after 10:00 a.m. (ET). The one exception is in January, the studies are launched on the second and fourth enterprise day of the month.

The subsequent Manufacturing ISM^® PMI^® Report that includes December 2025 knowledge will likely be launched at 10:00 a.m. ET on Monday, January 5, 2026.

The subsequent Providers ISM^® PMI^® Report that includes December 2025 knowledge will likely be launched at 10:00 a.m. ET on Wednesday, January 7, 2026.

*Except the NYSE is closed.

 

 

SOURCE Institute for Provide Administration