In every economy, the manufacturing sector is like a vital organ—sensitive to stress, responsive to stimulus, and deeply connected to the health of the whole. In September 2025, the world pressed its hand to the pulse of global industry via the Global Manufacturing Purchasing Managers’ Index (PMI), a widely watched composite indicator produced in collaboration among S&P Global, J.P. Morgan, and other partners.
This month’s data comes at a critical juncture: inflation remains sticky, supply chain strains lingers, geopolitical tensions press on trade routes, and central banks juggle growth with price stability. Against that backdrop, the September manufacturing PMI acts as a kind of thermometer—not perfect, but extremely useful—for gauging whether global industry is heating up, cooling down, or staying steady.
In this blog, I’ll walk you through the key figures, regional divergences, underlying forces, and implications for businesses and policymakers. I’ll also weave in real facts and invite you to consider what procurement and business development leaders—like Mattias Knutsson—might take away from these trends.
PMI September 2025: Global Overview and Trends
- In August, global business activity had already hit a 14-month high, supported by strong manufacturing output and resilient services expansion.
- In September, the Global Manufacturing PMI showed signs of softening or unevenness in many regions (some slipping back into contraction), signaling caution about the sustainability of that rebound.
- That said, pockets of strength remain: in economies where domestic demand is resilient, capacity is being tested, and firms are still contracting or expanding selectively.
Thus, while global economic momentum remains positive in many places, the manufacturing sector’s divergences raise questions about whether this is a steady recovery or a fragile rebound.
Key Regional Highlights
United States
- The ISM Manufacturing PMI for September rose modestly to 49.1%, from 48.7% in August—still below the 50 threshold, meaning overall contraction remains the trend, but at a slower pace.
- The Prices Index (which tracks raw material inflation) dropped to 61.9% from 63.7%, suggesting input costs are still rising—just a bit more slowly.
- The Backlog of Orders Index was 46.2%, improving from August’s 44.7%, yet still indicating shrinking backlogs, now for the 36th consecutive month.
- On the S&P Global side, the US Manufacturing PMI eased from a recent high of 53.0 in August to 52.0 in September.
- The US Composite PMI (manufacturing + services) also softened: from 54.6 in August to 53.6 in September (flash estimate). That’s still in expansion territory, albeit with less momentum.
Takeaway: The U.S. manufacturing sector remains under pressure—still contracting per ISM measures—but it’s decelerating less aggressively. The broader economy (via the composite measure) remains on somewhat firmer footing.
Eurozone & Western Europe
- The eurozone’s manufacturing sector slipped back into contraction: the HCOB (S&P Global) Eurozone Manufacturing PMI fell to 49.8, down from 50.7. That’s just under the 50 threshold that separates growth from contraction.
- New orders, especially exports, declined fairly sharply, while employment weakened and backlogs shrank at their steepest rate in months.
- On the services side and in composite measures, there is still expansion—Europe’s “private sector” (manufacturing + services) posted its best performance in 16 months in September (composite PMI ~51.2).
- However, the divergence is clear: services are carrying much of the burden, while factories struggle with external demand.
Takeaway: Europe’s manufacturing base is losing steam, especially where export demand is weak. The region’s recovery depends heavily on services and domestic spending.
China & Asia
- China’s official manufacturing PMI in September edged up slightly to 49.8, from 49.4 in August—but still remained in contraction territory (below 50).
- That marks the sixth straight month of factory contraction in China, reflecting weak domestic demand, property sector headwinds, and pressure from trade tensions.
- Interestingly, a private-sector PMI (from RatingDog) showed more optimism: ~51.2. This divergence underscores how tricky it is to interpret China’s “real” industrial health.
- Other Asian manufacturing hubs (e.g., South Korea, Japan) show mixed performance—some holding moderate expansion, others showing softening. (The S&P Global PMI release calendar includes those markets.)
Takeaway: China remains a drag on global manufacturing, but internal stimulus and regional divergence leave room for potential upsides. Asia’s fortunes are varied, and much depends on external demand and supply chain resilience.
Underlying Drivers & Risks
Input Costs and Inflation
One persistent theme across regions is cost pressure. Even where manufacturing is struggling, many firms still report rising prices for raw materials, energy, and logistics. In the U.S., the ISM Prices Index remains north of 60, indicating that inflation is a continued weight on margins.
When input costs rise faster than output prices can adjust, margins erode, and firms may delay investment or reduce hiring.
Demand (Domestic & External)
Weak external demand is biting in many export-dependent economies. In the U.S., New Export Orders contracted sharply—43.0% in September.
Domestically, consumer demand is under strain in many places due to tighter credit, inflation eroding real incomes, and central bank interest rates that remain elevated.
Supply Chain & Input Constraints
Some manufacturers report ongoing supply chain bottlenecks, logistics delays, or constraints in sourcing components—especially in industries sensitive to geopolitics (e.g., semiconductors, chemicals).
At the same time, firms in some regions are holding back orders or capital expenditure in anticipation of policy shifts or soft demand.
Business Confidence & Future Outlook
One curious detail: many PMI surveys show that business confidence or expectations for future growth are moderating—even when present output is stable or improving. That suggests firms are cautious in expanding during uncertain times.
In August, global business confidence slipped, despite strong output readings. The same cautious tone is carrying into September releases.
What This Means for Firms, Policymakers & Markets
- Manufacturers and supply chains should brace for variance. Growth will likely be uneven across sectors and geographies, so agility and flexibility will matter more than scale.
- Procurement and sourcing teams must navigate elevated input costs, supply risks, and shifting trade dynamics. Hedging, supplier diversification, and contract renegotiations will be critical.
- Policymakers will face pressure. On one hand, stimulus or easing might be tempting to support industry; on the other, inflation and debt constraints limit leeway.
- Financial markets will watch PMI trends closely. A sustained dip below 50 in global manufacturing could reinforce fears of global growth slowdown and push bond yields lower or weigh on industrial stocks.
Conclusion
The September 2025 global manufacturing PMI data presents a mosaic of contrasts: pockets of resilience, areas of contraction, and an undercurrent of caution. We see the U.S. trying to slow the bleeding, Europe’s factories flirting with contraction, and Asia wrestling with structural demand challenges. Across all this, inflation, cost pressures, and demand softness are recurring themes.
For businesses, this environment demands nimbleness. You can’t assume broad uniform recovery; instead, you must monitor local conditions, adapt procurement strategies, and maintain flexibility in sourcing. For policymakers, the balancing act intensifies: they must support growth without reigniting inflation.
And voices like Mattias Knutsson remind us that in turbulent times, leadership in procurement and business development is not optional—it’s essential. Those who anticipate, adapt, and act early will not just survive—they’ll position their organizations to lead.
