US Manufacturers More Optimistic Despite Trade Uncertainties, Health Care Costs: Survey

More than 80 percent of survey respondents reported paying tariffs on imported manufacturing inputs since the beginning of 2025.

President Donald Trump arrives to deliver a speech at the U.S. Steel Corporation's Irvin Works in West Mifflin, Pa., on May 30, 2025. Madalina Vasiliu/The Epoch Times

Optimism among American manufacturers rose in the fourth quarter despite concerns about trade uncertainties, surging insurance costs, and other sector-related challenges, the National Association of Manufacturers (NAM) said in a statement on Dec. 17.

NAM conducted its 2025 fourth-quarter outlook survey among 241 small, medium, and large manufacturers, and found “69.9 percent of respondents felt either somewhat or very positive about their company’s outlook, up 4.9 percentage points from Q3 2025.”

The association attributed the improvement in optimism to positive impacts from the One Big Beautiful Bill Act and President Donald Trump’s regulatory agenda.

Trump signed the bill into law in July, which provided business owners with ways to lower their tax burden and improve cash flows.

For instance, the bill permanently restored a depreciation benefit for business-owned property. It also enabled business owners to immediately deduct 100 percent of domestic research and development expenses rather than capitalizing and amortizing them over five years.

On Jan. 31, Trump signed an executive order directing agencies to limit the number of regulations they impose. For every new rule enacted, an agency needs to eliminate 10 existing policies. The order is intended to remove regulatory obstacles to growth.

While overall optimism improved in the fourth quarter, “trade uncertainties, rising health care costs and a weaker domestic economy are at the top of manufacturers’ business concerns,” the NAM survey report said.

For large manufacturers, with 500 or more employees, 84.9 percent cited trade uncertainties as their top business challenge. This number fell to 76.6 percent among medium-sized manufacturers with 50–499 employees and was 77.3 percent among small manufacturers with less than 50 workers.

Regarding concerns about rising health care and insurance costs, more than 94 percent of respondents said they have either seen higher premiums or expect premiums to rise in 2026, according to the report.

Skilled workforce is another major challenge faced by manufacturers. Only less than 10 percent of manufacturers are currently not looking to hire. There are over 400,000 job openings in the sector, with many businesses seeking technicians, machinists, welders, operators, assemblers, and packagers.

Manufacturers also said they were bearing higher costs due to international or state regulations that mandate the disclosure of emissions and climate risks.

“Of the respondents that are impacted by these rules, 92 percent face increased reporting costs and are diverting funds from productive uses to pay these added costs,” the report said.

Over 80 percent of respondents reported paying tariffs on imported manufacturing inputs since the beginning of 2025. Among large manufacturers, 97 percent paid tariffs, compared with 73 percent among small and medium-sized manufacturers.

Over the next 12 months, manufacturers foresee sales rising by 2.8 percent, production increasing by 2.4 percent on average, input costs rising by 4.1 percent, and exports increasing by 0.1 percent.

“In line with the improvement in the outlook, companies expect most indices to improve marginally over the next 12 months,” NAM chief economist Victoria Bloom said.

US Manufacturing Performance

A Dec. 1 statement from S&P Global said that operating conditions in the U.S. manufacturing sector improved for the fourth straight month in November.

Production and employment in the sector rose last month as businesses’ confidence in the sector’s outlook improved.

On the flip side, there was a “considerable” slowdown in demand growth, which S&P attributed partly to weak sales numbers. This has resulted in an “unprecedented” jump in the stock of finished goods for the second straight month, according to the statement.

“Encouragingly, manufacturers have grown more optimistic about the year ahead, with the ending of the government shutdown helping lift confidence from the sharp drop suffered in October,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said.

“Optimism is being fueled by hopes of improved policy support, including lower interest rates, as well as greater political stability, though it is clear that uncertainty remains elevated and a drag on business growth in many firms, holding confidence well below levels seen at the start of the year.”

The Small Business Administration (SBA) has jumped in to support the manufacturing sector. On Dec. 17, the agency approved its first round of 7(a) Manufacturers’ Access to Revolving Credit (MARC) loans.

MARC is the first-ever SBA loan offering specifically dedicated to manufacturers. In the first round, $3.5 million in working capital MARC loans were delivered to four manufacturers, according to the SBA.

“These loans support real factories, real workers, and real growth—and we encourage manufacturers nationwide to take advantage of this program to expand, modernize, and reshore American industrial dominance,” SBA Administrator Kelly Loeffler said.