Manufacturing shows strongest strength in four years, despite war in Middle East and tariffs

Manufacturing activity posted its best performance in four years in May, beating analysts' expectations despite geopolitical tensions and trade uncertainties, according to the Institute for Supply Management's (ISM) monthly report released Monday.

The ISM index came in at 54%, above the 53.2% anticipated by the economists' consensus. This is the highest figure since May 2022, when it reached 55.9%. Any reading above 50% indicates expansion in the sector.

Manufacturing holds up and advances under Trump's policy

Although 18% of the companies surveyed cited tariffs as a pressure factor, the sector showed remarkable resilience. On the other hand, despite tensions stemming from the war in the Middle East - mentioned by 42% of the companies - and price volatility, U.S. manufacturing continues to expand, demonstrating that protectionist measures and the "America First" approach are generating greater industrial strength and autonomy.

This is the second consecutive month of expansion in the sector, which is a positive sign heading into the 2026 midterms.