WASHINGTON, D.C. – Manufacturers continue to report a mixed bag of economic challenges, according to the National Association of Manufacturers Q4 2025 Manufacturers’ Outlook Survey. As manufacturers began feeling the positive impacts of the tax bill and the president’s regulatory agenda on their business, optimism ticked up, but trade uncertainties loom, and health care costs continue to rise as a top concern for manufacturers.
“In line with the improvement in the outlook, companies expect most indices to improve marginally over the next 12 months,” said NAM Chief Economist Victoria Bloom. “For example, manufacturers predict sales will increase 2.8%, up from 2.6% in Q3, and capital investments will grow 1.4%, up from 1.0% in the prior quarter. That said, while sentiment has improved, we are still below the historical average of 74%.”
Optimism rose 4.9 percentage points, with 69.9% of respondents reporting a positive outlook for their companies, up from 65.0% in Q3. Yet, in line with last quarter, trade uncertainties remained the top business challenge at 73.1%, with 80.3% of respondents reporting they have paid tariffs on imported manufacturing inputs since the start of the year. Additionally, rising health care and insurance costs rose to manufacturers’ second-highest business concern at 70.2%, with more than 94% of manufacturers expecting higher health insurance premiums in 2026, projecting an average jump of 11%. A weaker domestic economy and sales to U.S. customers ranked as the third-highest concern at 60.1%.
Other Key Survey Findings:
- A majority of manufacturers (80.3%) report paying tariffs on imported manufacturing inputs since the start of 2025, led by 58.6% of respondents paying Section 232 tariffs, 52.1% paying reciprocal tariffs on other countries under the International Emergency Economic Powers Act and 50.0% paying Section 301 tariffs on China.
- Tariffs are impacting manufacturers of all sizes, with 72.8% of small and medium-sized manufacturers with fewer than 500 employees paying tariffs on inputs this year—alongside 97% of large manufacturers.
- When it comes to hiring needs, 72.1% of respondents cite skilled production workers (technicians, welders and machinists), 60.1% point to core production workers (operators, assemblers and packaging) and 33.5% say they need high-skilled, degreed workers (scientists, researchers and engineers).
- Climate disclosure regulations are costing manufacturers, with more than one-third (38.2%) of manufacturers subject to new international or state laws and regulations requiring disclosure of emissions and climate risks. Of those respondents, 91.6% face increased reporting costs and are diverting funds from productive uses to pay these added costs.
- 82.3% of respondents indicated it is important to their companies for Congress to pass legislation maintaining robust, multiyear infrastructure investment to support manufacturing.
The NAM releases these results to the public each quarter. Further information on the survey is available here.
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