ISM: US manufacturing poised for growth in 2025

“Manufacturers are optimistic,” said Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee. “The first half of the year looks solid, and we’re anticipating even faster growth in the second half. It’s a positive outlook.”

Key industries leading the charge include machinery, computer and electronic products, and electrical equipment, with substantial revenue increases projected.

Capacity utilization in the manufacturing sector is currently at 82.3%, slightly down from mid-2024. However, production capacity is expected to increase by 4% in 2025, ISM said.

Companies are also keeping an eye on input costs. Raw material prices are forecasted to rise by 3%, consistent with 2024 trends, but respondents expect less pricing pressure than in recent years. “This easing is good news for profit margins,” Fiore noted.

Despite continued labor market challenges, manufacturing employment is set to grow modestly. Wages and benefits are projected to climb by 3.3%.

Meanwhile, the US dollar is expected to strengthen, supporting increased activity in both exports and imports. Executives see this as a critical factor in driving competitiveness abroad.

“2025 is shaping up as a rebound year for manufacturing,” said Fiore. “We’ve weathered some tough times, but the fundamentals are strong. Companies are investing, supply chains are stabilizing, and optimism is on the rise.”

Overall, ISM’s outlook points to growing positive momentum for manufacturing, a sector ready to drive economic growth in the new year.

Editor’s note:

Tom Derry, CEO of the Institute for Supply Management, will be a keynote speaker at the Tampa Steel Conference 2025 on Monday, Feb. 23. With a unique vantage point to observe major macroeconomic trends and the development of global supply chains, Tom’s keynote won’t be one to miss! Visit tampasteelconference.com for more information and to register.