The U.S. manufacturing sector is currently experiencing a period of contraction, as indicated by the Purchasing Managers' Index (PMI) registering at 49.0 in June 2025, marking the fourth consecutive month of decline. This downturn is largely attributed to sluggish new orders and rising input costs, significantly influenced by tariffs imposed by the Trump administration.
The administration's tariff policies, including substantial tariffs on steel, aluminum, and automobiles, have disrupted supply chains and increased delivery times, contributing to economic uncertainty. Despite these challenges, there is optimism within the sector, with a survey indicating that many industries anticipate revenue improvement in 2025.
Factory employment is expected to increase, suggesting a potential rebound from the current slump. However, the sector still faces significant hurdles, and employment remains below peak levels from the late 1970s, reflecting a long-term decline in the sector's contribution to U.S. employment.