News

USA - Manufacturing Sector Continues Expansion, Conflict Impact Uncertain

Issued at 2026-03-04



In light of the U.S. attack on Iran over the weekend and the widening Middle East conflict, manufacturers should be “on high alert” for supply chain volatility and should plan accordingly, said Susan Spence, chair of the Institute for Supply Management’s (ISM’s) Manufacturing Business Survey Committee, in a press call Monday morning.

Though the duration of the conflict remains uncertain, “you can never be too prepared,” she added.

Meanwhile, data collected before the war began showed the manufacturing sector expanded in February for the second month in a row—though only the third time in 40 months—according to the latest ISM Manufacturing PMI Report, released Monday.

The Manufacturing Purchasing Managers’ Index (PMI) came in at 52.4% in February, down just 0.2% from January’s reading.

February 2026 Manufacturing PMI chart

“In February, U.S. manufacturing activity remained in expansion territory, although growing at a slower pace than the month before,” Spence said in a statement. “Of the five subindexes that make up the PMI, two (New Orders and Production) indicated slower growth compared to the previous month, and the Employment and Inventories indexes remained in contraction.”

Though survey respondents continued to cite tariff instability as a challenge, others expressed more positive sentiments.

“Business is improving by the week,” an executive from the fabricated-metal industry commented. “Backlog is growing, and opportunities are everywhere. Monthly shipments are still lower than planned, but improving.”



Source: ISM