The Institute for Supply Management published its ISM Prices Index October 2026 reading on November 2. It came in at 75.2, down 2.7 points from 77.9 in September. In the same October Manufacturing PMI report, the Production Index rose 2.3 points to 59.0, its highest since November 2021 (60.5). The headline PMI rose a point to 55.5, and manufacturing has now expanded for 10 straight months.
The lower Prices number means costs rose more slowly in October. They still rose. A reading above 50 means prices are going up, and ISM says raw-material prices have now risen for 25 consecutive months. In October, 53.1% of respondents reported paying more, down 5.5 points. Another 44.1% saw no change, and only 2.8% reported paying less. All 16 industries that reported a direction said they paid higher prices. ISM's wording: "No industries reported paying decreased prices for raw materials in October."
Prices Paid has been above 70 every month since February. Purchasing managers need to know which inputs are holding it there and which ones they can push back on.
How the 2026 price readings moved
The Prices Index was 70.5 in February. In March it jumped to 78.3, the highest since 78.5 in June 2022, according to Trade & Industry Development's coverage of ISM's March report. April hit 84.6, the highest since April 2022. After that the index cooled: 82.1 in May, 73.0 in June and 71.1 in July, per ISM's July release. August also printed 71.1. September jumped back to 77.9, and October settled at 75.2, which Trading Economics also reports.
That makes nine monthly readings in a row above 70. The summer dip never got close to the 50 line. September's rebound erased most of it, and October gave back only part of the rebound.
Other October indexes show why suppliers still have pricing power. Supplier Deliveries was 59.1, meaning slower deliveries for an 11th month. Backlog was 54.6, down 1.8 points but still growing. New Orders rose slightly to 55.5. Customers' Inventories held at 41.6, a level respondents call "too low." When lead times are long and customers' shelves are thin, sellers rarely discount.
What ISM says is driving it
ISM's Susan Spence attributed the price pressure to steel and aluminum, tariffs on imported goods, and higher costs for petroleum-based products tied to the Middle East conflict. She described the metals increases as ones "that impact the entire value chain."
Respondents pointed to demand from data centers. A Miscellaneous Manufacturing respondent wrote: "New month, same trends: Any commodity consumed by AI/data centers is in a crunch, both for supply and pricing." Machinery respondents said "business remains strong, largely driven not only by data centers and mission critical infrastructure," and one added that "explosive growth in the semiconductor and government/defense spaces has put us on our heels."
The October up list, grouped by input
ISM's list of commodities up in price is long. Sorted into groups a buyer would recognize:
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Metals: aluminum (reported both up and down), copper, steel, hot-rolled steel, stainless steel, steel products and tungsten.
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Electronics: semiconductors, memory components, printed circuit boards and electronic components.
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Energy and petrochemicals: diesel fuel, fuel, energy, methanol, oil-based products and resins.
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Packaging and logistics: corrugated products, paper products and freight.
Two items were reported down: aluminum, which also appears on the up list, and polypropylene resin. Polypropylene is the only input that was reported down without also being reported up.
The short-supply list overlaps heavily with the up list: aluminum products, copper, electrical components, electronic components, integrated circuits, memory, printed circuit boards and steel. An input that is both rising and short gives a buyer very little leverage.
Steel: little room to negotiate
Buyers have the least leverage on steel. Steel Market Update put hot-rolled coil at "$1,290 per short ton (st) on average, up $10/st week over week" on October 20, and up $35/st from a month earlier. SMU also reported that mills are charging "a premium for what little spot tonnage remains for 2026." Steel shows up on ISM's up list in four forms and on the short-supply list as well.
For fabricators and machinery builders, this argues for locking in 2027 volume now instead of waiting for a year-end spot discount that current conditions don't support. If your business depends on one mill, start qualifying a second mill or service center. That work takes months, and it gives you more negotiating leverage than anything you can say on a call in the meantime.
DRAM and memory: also little room
Memory is on ISM's up list and its short list. TrendForce forecast on September 30 that conventional DRAM contract prices will rise 10% to 15% quarter over quarter in Q4 2026. It said PC OEMs "continue to procure aggressively" because they expect DRAM to stay tight into 2027. When the largest buyers are stockpiling, a mid-market electronics assembler won't get much from a price objection.
Contract structure helps more. TrendForce notes that some suppliers' increases "are expected to lag the market average due to pricing mechanisms stipulated in long-term agreements (LTAs)." If you have an LTA, enforce its pricing mechanism exactly as written and challenge any increase that runs ahead of it. If you don't, ask suppliers what an LTA would cost you in volume commitment, and weigh that against paying market-average increases each quarter.
NAND and client SSDs: some room
NAND overall is still rising. TrendForce projects contract prices up 15% to 20% QoQ in Q4. Leverage varies by segment, though. For client SSDs, TrendForce wrote: "With buyers holding sufficient inventories and purchasing requirements remaining limited, NAND Flash suppliers have adopted a more flexible pricing stance." It also reported that smartphone OEMs are buying "only the minimum purchase volumes needed to maintain supplier relationships" for eMMC and UFS storage.
If you buy storage and already carry enough inventory, you can push back here, and buying the minimum is one way to show suppliers you aren't desperate. Buying ahead of need in this segment works against you.
Commodity resins: the most room
Resins appear on ISM's up list. But polypropylene was the one input reported only as down, and the broader resin market supports that. Plastics Technology's resin panel saw polyethylene on "a flat-to-down trajectory in the September-October time frame." The panel said PVC "going into October could be flat-to-down" and expected PET to drop another 1 to 2 cents per pound in September and then hold flat in October. PP had already fallen 1.5 cents per pound in August, and panelists saw room for a further decline in September. Dow and NOVA announced September PE increases of 5 to 7 cents per pound, but they didn't get broad follow-through.
Molders and packaging converters should challenge resin surcharges that don't match these trends. Tie contracts to a published index so price cuts reach you as quickly as increases do, and don't buy ahead of need while the panel expects flat-to-down pricing.
Aluminum: a mixed case
Aluminum is on both the up and down lists, and aluminum products are also on the short-supply list. ISM's sources don't separate the metal price from regional premiums, fabrication or conversion costs. In general, though, aluminum invoices combine those components, and they don't always move together. Ask suppliers to break an increase into its components and negotiate each one separately, instead of accepting a single blended percentage.
Freight and fuel
Freight, fuel and diesel are all on the October up list, but the report doesn't say how much they rose. Even without a number, this is a good time to review the fuel-surcharge tables in your carrier contracts. Check what index each table references, how often it resets, and whether it adjusts down as readily as it adjusts up.
A checklist for purchasing and plant managers
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Split each increase letter into two parts. Separate the portion tied to a published index (HRC, resin benchmarks, fuel indexes) from the portion that isn't. Negotiate mostly on the part that isn't tied to an index.
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Ask which index each increase is based on. If a supplier can't name one, you have room to push back. That's most likely on resins and some storage products, and least likely on steel and DRAM.
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Set inventory targets item by item. ISM's Inventories index rose 2.8 points to 51.4, while Customers' Inventories stayed "too low" at 41.6. Build buffer stock in steel and memory, where supply is short and prices are rising. Keep resin and client storage lean.
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Start second-source qualification now for any input on the short-supply list where you rely on one supplier.
Related reading
Sources
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Manufacturing PMI® at 55.5%; October 2026 ISM® Manufacturing PMI® Report (PR Newswire)
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Manufacturing PMI® at 55.6%; July 2026 ISM® Manufacturing PMI® Report (PR Newswire)
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United States ISM Manufacturing Prices Paid (Trading Economics)
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Sheet and plate price gains accelerate as 2026 tons dry up (Steel Market Update, Oct 20, 2026)
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October 2026: A Mostly Flat-to-Down Price Trajectory for Volume Resins (Plastics Technology)