As U.S. factories endured a difficult year, U.S. manufacturing activity in December saw its sharpest contraction since 2024.The U.S. ISM Manufacturing PMI for December came in at 47.9, marking the 10th consecutive month the index has remained below 50, indicating that the sector is in contraction. The decline in the index reflects that manufacturers are depleting raw material inventories at the fastest pace since October 2024.This suggests that many companies are relying on existing inventories to meet weak demand. However, one bright spot in the report is that customer inventories are falling at the fastest pace since October 2022, indicating that factory orders and production may strengthen in the coming months.Nevertheless, the overall economic uncertainty stemming from tariffs and Donald Trump the shifting trade policies during ’s first year in office has proven to be a challenge for many companies weighing expansion plans.