US manufacturing: ISM index records yearly low in December; activity contracts for 10th straight month

Manufacturing activity in US was at record bottom December, marking 10th consecutive month of contraction. The Institute of Supply Management (ISM) index slipped to 47.9 from 48.2 in November.The latest figures mark the lowest reading for the year, with production levels falling below November's numbers. While employment showed a minor uptick of 0.9 percentage points, it remained in contraction territory.There was a glimmer of hope in the report, as ISM survey chair Susan Spence noted that customers' inventories were "too low," typically a positive indicator for future manufacturing activity. However, she cautioned that "several consecutive months of gains in these indicators are necessary for a longer-term recovery."The industry landscape remains largely pessimistic, with only two sectors reporting growth while 15 experienced contraction. Companies across different sectors shared their struggles. A computer and electronic products firm reported, "Things are quieter regarding tariffs, but prices for all products remain higher," adding that they've had to raise prices while seeing their margins shrink.The transportation sector painted an especially grim picture. One company, quoted by AFP, citing the ISM report, said "things are not improving," referring to low truck rental usage. It believes"the first half of 2026 will be another bust, and we're now hoping things pick up in the second half, even as the North American truck fleet continues to age."