The ISM prices paid September 2026 reading came out on October 1, and it moved much more than the headline did. The Institute for Supply Management's Prices Index rose 6.8 points to 77.9, up from 71.1 in August. The Manufacturing PMI was nearly unchanged at 54.5, down 0.1 point from 54.6. Demand is holding up, and costs are rising in nearly every category. All 16 industries that reported on prices said they paid more. None said they paid less, and ISM listed no commodity as down in price. ISM says raw-material prices have now risen for 24 consecutive months.
For a plant manager or operations VP, the question is less about the macro picture and more about which lines on the bill of materials are moving and whether those costs are already locked into orders that ship months from now.
What 77.9 tells you, and what it does not
Do not read the Prices Index as a percentage price increase. It shows how widely purchasing managers are reporting higher prices. In September, 58.6% of respondents reported paying more, up 12.4 points from 46.2% in August, according to ISM. The share of buyers facing increases rose sharply in one month.
The index does not show how large any single increase is. A plant with mostly steel in its BOM and a plant with mostly corrugated and diesel in its costs can both count toward the same 77.9 and see very different hits to margin. The survey tells you to check your own costs. Your own BOM tells you how big the problem is.
Three drivers, and some long streaks
ISM's Susan Spence explained the cause directly: "The Prices Index reading is still being driven by (1) increases in steel and aluminum prices that impact the entire value chain, (2) tariffs applied to many imported goods and (3) increases in petroleum-based products as a result of the Middle East conflict."
The commodity list shows how long some of these increases have run. In ISM's count of consecutive months of reported increases, aluminum is at 34, copper at 15, steel at 11, steel products at 10, hot-rolled steel at 9, stainless steel at 8 and resins at 8. Oil-based and plastic-based products are both at 6, and freight and fuel are both at 7. Diesel fuel (2 months) is a newer addition. Reuters, reporting on the release, said diesel prices were at record highs.
The full up-in-price list also includes brass products, copper products, corrugated products, electrical components, electronic components, memory components, nickel, packaging materials, printed circuit boards, semiconductors, soybean meal and zinc. With increases this long and this broad, a single annual price review is unlikely to keep pace.
Exposure map: which growing industries carry which costs
Twelve industries reported growth in September: Electrical Equipment/Appliances; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber; Computer & Electronic Products; Fabricated Metal Products; Furniture & Related Products; Food/Beverage/Tobacco; Transportation Equipment; Machinery; Miscellaneous Manufacturing; and Chemical Products. Two contracted: Printing & Related Support Activities and Textile Mills. ISM said only 2% of manufacturing GDP was contracting in September, compared with 22% in August.
The grouping below is ManufacturingMag's analysis. It matches ISM's commodity lists to the industries that are growing. ISM does not publish this mapping. The respondent comments are quoted from the ISM release.
Metals-heavy: Primary Metals, Fabricated Metal, Machinery, Transportation Equipment, Electrical Equipment
Inputs affected: steel in several forms, aluminum, copper, nickel, zinc and brass. An Electrical Equipment, Appliances & Components respondent said: "Raw metals continue to be challenging, especially with the uncertain nature of tariffs being on and off again." A Machinery respondent pointed to "the higher cost of components from overseas due to tariffs and freight rates," and said higher interest rates are slowing new construction projects. A Transportation Equipment respondent cited "the trade war with Canada, which every day is getting worse."
Electronics-heavy: Computer & Electronic Products, Electrical Equipment, Machinery
Inputs affected: semiconductors, memory components, printed circuit boards, and electrical and electronic components. A Computer & Electronic Products respondent listed tariff challenges, "finding alternate sources of supply outside of China, local pushback on data centers in the U.S. and continuing material/component shortages."
Resin and oil-heavy: Plastics & Rubber, Chemical Products
Inputs affected: resins, oil-based products and plastic-based products. These are the costs most directly tied to the petroleum driver Spence named.
Freight and packaging: Food/Beverage/Tobacco, Furniture, Miscellaneous Manufacturing
Inputs affected: fuel, diesel, freight, corrugated products and packaging materials. A Food, Beverage & Tobacco respondent said: "Fuel costs are still affecting transportation costs and the overall cost of goods. Beef costs remain high, with no relief in sight."
Most plants fall into more than one group. A machinery builder buys steel, PCBs and freight. The map is a starting point for deciding which supplier contracts to review first.
Double exposure: rising prices and short supply on the same items
The most serious risk is in items that appear on both ISM lists. Copper, steel, aluminum (products), electrical components, electronic components, memory and printed circuit boards are all rising in price and also listed as in short supply. The short-supply list also includes DRAM and tungsten products. Electronic components have been in short supply for 19 consecutive months, and electrical components for 15.
For these items, the risk is to both margin and delivery. ISM's Supplier Deliveries Index was 59.0, which means deliveries slowed for the 10th month in a row. One Machinery respondent said: "Orders have doubled yet again, and delivery times have also doubled, in the semiconductor, electronics and government sectors, with remaining sectors flat to down." When an input is both expensive and hard to get, switching suppliers to save money may not be possible, and paying a premium for supply you can count on can be the better choice.
Why Q4 quotes matter
The backlog figures make the timing worse. Backlog of Orders rose 4.6 points to 56.4. New Orders rose 1.6 points to 55.3. Production fell 1.6 points to 56.7, and Inventories fell 2.0 points to 48.6. Customers' Inventories were at 41.6. A Fabricated Metal Products respondent said: "Order levels remain strong and elevated; we have orders through year-end at above forecast levels. Our biggest challenge continues to be a severe shortage of workers."
When order books run to year-end and inventories are shrinking, a fixed-price quote issued in October sets the selling price now. The material bought to fill that order may be priced weeks or months later, after more of the increases already underway. A plant that quotes from last quarter's standard costs is giving away margin on every order in that backlog.
What purchasing and sales teams can reprice or protect
These are practical options for operators to consider. They are not ISM findings.
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Index-linked or surcharge clauses. Tie metals and resin content to a published index, or add a surcharge that adjusts at set intervals. This shifts part of the input risk to the customer on long-lead orders.
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Shorter quote validity. Cut validity windows on quotes with large shares of steel, aluminum, copper, electronics or resin. A 90-day quote in a market where buyers report paying more every month carries real risk.
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Separate freight and fuel lines. With freight and fuel rising for seven straight months and diesel newly on the list, quoting delivered pricing with logistics bundled in hides a cost that is moving on its own.
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Qualify second sources for short-supply items. Start with the double-exposure parts: PCBs, memory, electronic and electrical components, and the metals. Qualification takes time, so begin before a shortage stops a line.
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Decide deliberately between inventory and cash. Buying ahead on items that are rising in price and in short supply can protect both margin and delivery dates, but it uses working capital and adds the risk of carrying stock. Make the decision part by part, based on lead time and exposure, rather than as a blanket policy.
The counterpoint: do not price as if demand is guaranteed
Some of the strength may not last. A Chemical Products respondent said: "Better performance was driven primarily by temporary market effects, including (1) geopolitical uncertainties, (2) customers bringing forward purchases, (3) delayed raw material price increases and (4) reduced competitor capacity." Customers who bought early to get ahead of price increases will not repeat those orders, and delayed raw-material increases still have to come through.
The headline also came in below expectations. Reuters reported that economists had expected the PMI to rise to 55.0. Reuters added that the price increase fit economists' expectation that inflation could stay above the Fed's 2% target for some time. New Export Orders fell 2.3 points to 50.9, and Imports fell 1.5 points to 51.0. Employment rose 1.5 points to 52.7. Repricing to protect margin makes sense. Repricing on the assumption that customers have no other choice can lose orders if demand softens.
What to watch, and the decision to make now
In the October ISM report, three indexes matter most for this decision: the Prices Index (does breadth keep rising from 77.9 or level off?), Supplier Deliveries (does the slowdown continue past 10 months?) and Backlog of Orders (does 56.4 hold?). If prices and deliveries both stay high while backlogs grow, cost protection in contracts becomes more urgent.
The decision to make now is simpler. Pull the BOMs for orders shipping in Q4 and Q1. Flag every line that appears on ISM's up-in-price list, and give priority to the ones that also appear on the short-supply list. Then check whether the quotes behind those orders protect you. If they do not, change the terms on the next quote.