Manufacturers are concerned about trade, healthcare costs, and other issues, but three-quarters of them are optimistic about their prospects in 2026, the National Association of Manufacturers reported in its latest quarterly member survey.

According to the survey conducted last month, 75.3% of respondents felt either somewhat or very positive about their company’s outlook. That is 5.4 percentage points higher than reported in the Q4 2025 survey and above the historical average of 74.3% for the first time since Q1 2023, NAM said in a news release.

Manufacturers continue to face significant challenges, with 70.6% of respondents citing trade uncertainties as their most pressing business concern. This was followed by rising healthcare and insurance costs at 69.8%, and rising raw material and other input costs at 57.5%.

When broken down by business size, 80% of manufacturers with 500 or more employees cited trade uncertainties as their top business challenge. By contrast, 78% of manufacturers with 50 to 499 employees and 75% of manufacturers with fewer than 50 employees cited rising healthcare costs as their top business concern, with trade uncertainties coming in second at 67% and 61%, respectively.

“Manufacturers are ready for liftoff, but the skies need to clear,” NAM President and CEO Jay Timmons said in a statement. “This quarter shows a mixed bag of results with real momentum from tax reform, regulatory rebalancing and energy policy.”

NAM noted that manufacturers could select more than one response, which exceeded 100%

Here are some other key takeaways from NAM’s survey.

International trade and supply chains As the United States-Mexico-Canada Agreement is being reviewed, 54.6% of respondents reported relying on either Canada or Mexico for critical parts of their supply chains, and 50% of those rely on both countries. Furthermore, 82.2% source raw materials or other inputs from either country, 62.7% rely on a customer base from across the border and 53.4% use production or distribution facilities there.

In addition to ongoing negotiations over the USMCA, President Donald Trump’s tariffs and the Iran conflict continue to impact supply chains. Last month, Trump invoked Section 122 of the Trade Act of 1974 to implement a 10% global surcharge on most imports to the U.S. shortly after the Supreme Court struck down wide-ranging levies he previously installed under the International Emergency Economic Powers Act.

All of this is stressing the international trading system and leading companies to focus more on supply chain agility. NAM’s survey results “underscore how essential durable supply chains are to manufacturing success and how critical Canada and Mexico are to that system, which is why we need to preserve and strengthen the USMCA,” Timmons said in the news release.

Regulatory reform The federal government is in the midst of a significant deregulatory effort, which NAM and other trade groups have largely supported.

For example, the U.S. EPA recently rescinded the Obama-era endangerment finding concluding that six greenhouse gases pose a threat to public health and welfare. The EPA is also reconsidering the Good Neighbor Plan, which sought to cut ozone-forming zone-forming nitrogen oxide emissions from power plants and industrial facilities, as well as certain National Ambient Air Quality Standards for particulate matter. The agency has also delayed greenhouse gas reporting requirements and may seek to curtail them further.

Last year’s passage of the One Big Beautiful Bill Act also included favorable tax provisions for manufacturers.

According to the survey, 46.6% of manufacturers said they are benefiting from the Trump administration’s regulatory reform measures. In addition, only 33.19% of manufacturers listed an unfavorable business climate as a top concern — the smallest share since NAM’s Q1 2020 survey.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved