The S&P Global US Manufacturing Purchasing Managers' Index improved to 51.8 in December (flat from the 51.8 flash estimate), compared to 52.2 in November, and matching expectations in the Econoday survey of forecasters. Tariffs continue to dampen exports, and fuel operating expenses at an elevated pace. Meanwhile, both input and output costs rose at their slowest rate in 11 months, and there was a renewed contraction in new orders.

The decline was mild, but nonetheless the first in a year. Exports were also a source of demand weakness, falling for the seventh successive month, it said. Tariffs were reported to have weighed on export sales, especially to Canada.

A reduction in demand led to weaker output gains in December, the softest in three months. Amid a reduction in sales, production increased sufficiently for firms to continued adding to their stocks of finished goods for the fifth month in a row, though the rate of accumulation moderated noticeably from November's survey record, it added.

Looking ahead, manufacturers are upbeat about the outlook for sales and production, tied to expectations of lower interest rates along with business growth and investment plans. That said, the degree of confidence eased since November amid a lack of new work to replace existing orders and the ongoing uncertainty over tariffs and trade policy, the report warned.

Tariffs continued to drive up input prices last month, with vendors reportedly raising charges. Input cost inflation slowed from November to an 11-month low but remains historically elevated. In the same vein, manufacturers reported their smallest uplift in charges since the start of 2025, but inflation remains comfortably above trend.

On the jobs front, firms reported sustained employment growth into the end of 2025, with job creation at its most pronounced level since August. Confidence in the outlook also remained positive despite easing slightly since November, S&P said.

The consensus sees no revision in the final from the flash at 51.8.

Based on monthly questionnaire surveys of selected companies, the Purchasing Managers' Manufacturing Index (PMI) offers an advance indication on month-to-month activity in the private sector economy by tracking changes in variables such as production, new orders, stock levels, employment and prices across manufacturing industries. The final index for the current month is released roughly a week after the flash.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the ISM manufacturing index in the U.S. and the Markit PMIs in the U.S. and elsewhere, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.

The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.

Markit originally began collecting monthly Purchasing Managers' Index (PMI) data in the U.S. in April 2004, initially from a panel of manufacturers in the U.S. electronics goods producing sector. In May 2007, Markit's U.S. PMI research was extended out to cover producers of metal goods. In October 2009, Markit's U.S. Manufacturing PMI survey panel was extended further to cover all areas of U.S. manufacturing activity. Back data for Markit's U.S. Manufacturing PMI between May 2007 and September 2009 are an aggregation of data collected from producers of electronic goods and metal goods producers, while data from October 2009 are based on data collected from a panel representing the entire U.S. manufacturing economy. Markit's total U.S. Manufacturing PMI survey panel comprises over 600 companies.