US factory activity picked up speed in October, with the Institute for Supply Management’s manufacturing index rising to 55.5 from 54.5 in September, beating economists’ expectations and marking a tenth straight month of expansion. Any reading above 50 signals growth in the sector, which accounts for just under a tenth of the American economy.
The standout was production. The survey’s output index climbed to 59.0, its highest since November 2021, as strong demand from artificial intelligence, data centres, semiconductors and infrastructure kept order books full. New orders edged up to 55.5, while export orders also improved, and backlogs remained in expansion territory.
Employment growth cooled slightly, with the jobs index easing to 52.4 from 52.7, though factories still added workers for a fourth consecutive month. Supplier deliveries slowed for an eleventh month, and inventories swung back into expansion at 51.4 after months of drawdowns.
The survey’s price gauge offered only partial relief. The prices-paid index fell to 75.2 from 77.9, its largest monthly drop, but remained at a level that points to widespread cost increases. More than half of respondents said they paid more for inputs, citing higher steel and aluminium prices, tariffs on many imported goods and costlier petroleum-based products linked to the Middle East conflict.
The mood among purchasing managers, however, turned gloomier. Sentiment in the survey’s written comments worsened for a third straight month, with about two-thirds of comments negative, many pointing to pricing volatility, longer lead times, tariffs or the war with Iran.
The figures arrive in a busy week for the US economy, with the midterm elections on Tuesday, the Federal Reserve’s rate decision in focus and the monthly jobs report due on Friday. On the survey’s past relationship with the wider economy, the October reading corresponds to annualised growth of 2.7% in real GDP.
Sources: Institute for Supply Management, October 2026 Manufacturing PMI Report (https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/pmi/october/); Reuters, “US manufacturing picks up in October; input prices stay high” (https://www.reuters.com/world/us/us-manufacturing-picks-up-october-input-prices-stay-high-2026-11-02/)
