September 2026 Monthly Manufacturing Insights
September brought a partial answer to August’s manufacturing slowdown: orders and backlogs strengthened, while production growth eased and costs rose more sharply in the ISM survey. Both major purchasing manager surveys remained in expansion, but the improvement in demand came with more pressure on manufacturers’ ability to deliver.
New factory announcements continued to support the longer-term outlook, particularly in electrical infrastructure. Projects scheduled for later years offer limited relief for immediate supply constraints.
A Month in Manufacturing Data
Perspectives from the ISM Report
The ISM Manufacturing PMI registered 54.5 in September, edging down from 54.6 in August while marking a ninth consecutive month of expansion. Readings above 50 indicate growth.
Demand strengthened beneath that nearly unchanged headline. New Orders rose to 55.3 from 53.7, and Backlog of Orders climbed to 56.4 from 51.8. The Employment Index increased to 52.7 from 51.2. Production continued growing at a slower pace, with its index declining to 56.7 from 58.3.
The Prices Index jumped to 77.9 from 71.1, indicating more widespread raw material price increases.
Insights from S&P Global
S&P Global’s final U.S. Manufacturing PMI rose to 55.9 from 53.9, its highest reading since May 2022. Output and new orders accelerated, supported by domestic demand and business from government and technology-related industries. Manufacturers surveyed by S&P reported their fastest employment growth in more than five years.
However, supplier delivery times lengthened at the sharpest rate since August 2022. Input-cost inflation accelerated even as selling-price inflation eased. Stronger demand therefore arrived alongside greater difficulty securing the materials needed to fulfill orders.
What the Data Means
September’s rebound in orders and backlogs is encouraging, but it does not establish that production can keep pace. A growing backlog can represent future revenue or work delayed by shortages. Reviewing unfinished orders by material availability, staffing, and promised delivery date helps manufacturers distinguish those situations before accepting additional commitments.
The cost picture also changed. ISM’s Prices Index had held at 71.1 in July and August before September’s jump. S&P’s combination of faster input-cost inflation and slower selling-price inflation suggests potential pressure on margins. Selling prices are still rising, but that offers limited protection if a manufacturer’s own costs rise faster. Reviewing material and freight assumptions before renewing quotes becomes particularly important.
Employment provides a more sustained positive signal. September marks ISM’s third consecutive expansionary employment reading, following July’s first positive reading in 33 months. That extends the recovery August’s report was watching. The next question is whether additional staffing helps manufacturers complete more work, especially where the constraint involves a particular skill, production stage, or shift.
The surveys continue to give different readings on exports. ISM’s New Export Orders Index slipped to 50.9 from 53.2 but remained expansionary, while S&P reported a fifteenth consecutive monthly decline. The disagreement persists from August and argues against treating international demand as a dependable source of momentum.
For smaller manufacturers, these findings favor decisions tied to actual customer commitments. Additional purchasing or overtime may help fulfill firm orders, but either can become expensive if delivery schedules change. Comparing the cost of securing capacity now with the consequences of a missed shipment makes the response specific to the order.
New Factory and Manufacturing Announcements
IndustrySelect’s September roundup highlights continued investment in electrical infrastructure, alongside expansion in appliances, automotive products, and food manufacturing. The projects include planned facilities, changes to existing operations, and a September grand opening.
Eaton Expands Electrical Enclosure Capacity in Arkansas
Eaton announced an investment exceeding $242 million for a new facility in North Little Rock. The 1-million-square-foot plant will produce customized modular electrical enclosures through its Fibrebond business, serving data centers, utilities, and industrial customers. Eaton expects more than 1,200 jobs and a doubling of its U.S. manufacturing capacity for these enclosures.
Hitachi Energy Plans a $528 Million Transformer Factory
Hitachi Energy’s planned Gallman, Mississippi, factory will expand transformer production serving the U.S. power grid. Construction is expected to begin in late 2026, with production scheduled for 2029. The project will more than double capacity relative to the nearby Crystal Springs operation, whose transformer production will transfer to Gallman when the new facility is ready.
Okonite Adds High-Voltage Cable Production in South Carolina
Okonite announced a $400 million expansion in Orangeburg County, including a roughly 552,000-square-foot plant and 105 new jobs. The facility will manufacture high-voltage cable on the company’s existing property. Construction is scheduled to begin in the fourth quarter of 2026 and take approximately two to three years.
GE Appliances Reshapes Its Louisville Campus
GE Appliances and the IUE-CWA announced a $1 billion investment package for Appliance Park in Louisville, Kentucky. It includes more than $400 million to move dryer production from Mexico and approximately $112 million for equipment and product-platform updates.
The total also includes a previously announced $490 million washer investment. GE says the package will help secure 4,700 existing production jobs, with the new dryer operation expected to begin in late 2027.
Pirelli Commits $1.2 Billion to Georgia
Pirelli announced a multiyear expansion of its existing Rome, Georgia, facility, with 1,000 new jobs planned. The project will add advanced robotics and further manufacturing capacity. Its impact will develop gradually: the company expects most hiring to begin in 2029 and full operations in 2033.
Kikkoman Opens Its Third U.S. Production Facility
Kikkoman held the grand opening of its Jefferson, Wisconsin, plant on September 18, with shipments scheduled to begin in October. The 240,000-square-foot facility will produce sauces and seasonings for retail, foodservice, and food manufacturing customers. It represents approximately $560 million in investment over ten years and incorporates digital tools for traceability and production visibility.
Future Outlook
October’s survey results will help show whether September’s stronger order growth translates into faster production and more manageable backlogs. Employment deserves attention alongside those measures: continued hiring would be more encouraging if it helps manufacturers meet delivery commitments.
Input costs are another test. September interrupted two months of stability in ISM’s Prices Index. Further increases could complicate pricing and purchasing decisions even if demand remains healthy.
The announced factory investments expand the longer-term possibilities, but their benefits arrive on different schedules. Through the fourth quarter, manufacturers still need to assess supplier commitments, available production capacity, and the cost of fulfilling orders with the resources they have today.
