Manufacturing News
November 4, 2026
November 4, 2026 · Statewide · Story 5 of 5
September Factory Orders Beat Expectations as Tariff-Driven Margin Squeeze Builds
The Commerce Department reported Nov. 3 that U.S. factory orders rose 1.8 percent in September to $677.2 billion, beating the 1.2 percent consensus, with transportation equipment up 4.6 percent and machinery, computers and electronics, fabricated metals and primary metals all posting gains. ISM's October Manufacturing PMI hit 55.5, a tenth straight month of expansion, with the Production Index at its highest level since November 2021. But ISM's Prices Index stayed elevated at 75.2 even as manufacturer sentiment worsened for a third straight month on tariffs and pricing volatility, and a Conexus Indiana member survey found one Indiana manufacturer reported a key input jumping from $20 per pound to $200 per pound in a year under Section 232 steel and aluminum tariffs. For Indiana's transportation and primary metals base, order backlogs look strong on paper while margins are getting squeezed underneath.
- Impact
- The headline strength masks a margin squeeze building underneath: ISM's Prices Index stayed elevated at 75.2 in October even as sentiment turned increasingly negative (66% of survey comments were negative), which Conexus Indiana's own member survey ties to real cost shocks, one Indiana manufacturer reported a key input jumping from $20/lb to $200/lb in a year under Section 232's steel and aluminum tariffs. For Indiana's transportation-equipment and primary-metals heavy base, this month's order strength is good for backlogs, but the electrical equipment and appliance category's 0.3% decline is a warning sign: it's losing demand share to AI-driven capital goods while taking the hardest hit from aluminum cost inflation.
- Watch
- Whether the gap between ISM's 55.5 reading and S&P Global's competing 54.9 October PMI widens further, and how fixed-price contracts signed before this year's tariff increases perform as Section 232's derivative expansion works through fabricators' books.
- For the huddle
Are any of our fixed-price customer contracts locked in before this year's steel and aluminum tariff increases, and if so, how much margin are we absorbing as those orders ship?
Given that at least one Indiana manufacturer has seen a key input rise from $20 to $200 per pound under Section 232, pull your fixed-price contracts signed before this year's tariff increases and calculate exactly how much margin you are absorbing on orders still shipping under those terms.
Sources
- US factory orders beat expectations in September amid broad strength · tradingview.com
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