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US manufacturing surges back: ISM PMI rises to 52.6 in January 2026.
With the ISM Manufacturing PMI rising to 52.6 from 47.9 in December, the US manufacturing industry broke a 12-month run of contraction in January 2026. With significantly outperforming expectations of around 48.5, this represented the highest reading since August 2022. The headline number above 50 points to widespread growth driven mostly by a rapid rebound in new orders and manufacturing activity after the holiday season.
Key sub-indexes demonstrated strong growth: production increased 5.2 points to 55.9, both solidly in expansion territory, while new orders climbed 9.7 points to 57.1. While input prices kept to climb mildly (59.0), supplier shipments slowed (54.4), suggesting longer lead times. Although there was a 3.3-point increase, employment contracted at 48.1 since businesses were wary about hiring given tariff-related uncertainties.
Five of the six biggest manufacturing sectors grew, driven by strength in Machinery and Transportation Equipment. Panelists stressed pre-tariff inventory accumulation, post-holiday reordering, and lingering questions about steel/aluminum tariffs and supply-chain volatility. This PMI improvement matches an expected 1.7% annualized GDP growth contribution, providing an early good indication for more general US economic momentum in 2026.
