Furniture bucks trend as manufacturing contracts for third straight month

Spencer Musick //Senior Editor//June 3, 2025

TEMPE, Ariz. — The U.S. manufacturing sector contracted for the third consecutive month in May, with the Manufacturing PMI falling slightly to 48.5%, according to the Institute for Supply Management’s latest Report On Business released Monday.

Furniture and related products industry was among a handful of sectors to show growth despite the broader slowdown.

Susan Spence, chair of ISM’s Manufacturing Business Survey Committee, said the report reflects continued economic headwinds for U.S. manufacturers, as production and employment indices remained in contraction territory.

New orders, a key measure of demand, contracted for the fourth month in a row, with an index reading of 47.6%, a slight improvement over April’s 47.2%. Production also remained in contraction, although it ticked up to 45.4%, from 44% in April. The Employment Index showed similar modest improvement, increasing to 46.8% but still below the 50% threshold that indicates growth.

One bright spot came from the Supplier Deliveries Index, which rose to 56.1% that suggests ongoing delays, often seen as a sign of rising demand. However, Spence attributed the slower deliveries more to port congestion and tariff-related disruptions than to increased consumer or industrial demand.

Raw materials inventories fell sharply, with the Inventories Index dropping to 46.7% from April’s 50.8%. Imports fell into deeper contraction, down 7.2 percentage points to 39.9%, while export orders also declined significantly.

Despite the overall downturn, several industries managed to expand in May. Furniture and related products were among the seven sectors reporting growth, along with plastics and rubber products, petroleum and coal products, nonmetallic minerals, electrical equipment, fabricated metals and machinery.

The other seven sectors surveyed — including wood products, food and beverages, and transportation equipment — contracted, highlighting the unevenness in the manufacturing economy.

Spence noted that 57% of the sector’s gross domestic product contracted in May, up from 41% in April. However, the share of manufacturing GDP with a composite PMI at or below 45% fell to 5%, down from 18% the prior month, a potential sign that the worst of the slowdown may be behind.

Still, uncertainty remains. “Companies are continuing to revise production plans downward,” Spence said. “Head-count reductions are ongoing, and input weakness — including inventory drawdowns and import contraction — points to continued caution in the months ahead.”

Customer inventories in the manufacturing sector continued to decline in May, with ISM’s Customers’ Inventories Index falling to 44.5%, down from 46.2% in April. According to ISM Chair Susan Spence, inventory levels remain below what panelists consider “about right,” indicating that demand for products is likely to support future production growth.

Furniture was one of 10 industries reporting customer inventories as too low in May. Alongside categories like wood products, electrical equipment and machinery, the low inventory levels suggest that replenishment demand could help support furniture production even as broader manufacturing activity contracts.

The Prices Index remained elevated at 69.4%, indicating continued cost pressures, albeit slightly less severe than in April.

The ISM report, based on a monthly survey of supply executives, is closely watched as a leading indicator of U.S. manufacturing health. A reading below 50% signals contraction, while a reading above 50% indicates expansion.

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