US Manufacturing Sector

The 284,452 manufacturing establishments in the US produce goods for direct consumption and use in manufacturing other products. Manufacturing operations use machinery, computer systems, and workers to form, modify, assemble, test, and package goods. Major customers include other manufacturers, distributors and wholesalers, retailers, exporters, and end-consumers.

Foreign Trade Policies and Tariffs

Manufacturers are subject to trade restrictions, tariffs, regulations, and demands from foreign countries that can be politically and economically influenced.

China’s Manufacturing Dominance

US manufacturers compete for market share domestically and internationally with producers in other nations, most notably China.

Sep 20, 2026 - Rise in Reshoring

• More US manufacturers are bringing production back home, but tariff uncertainty and higher domestic costs remain major hurdles, according to the 2026 Reshoring Survey Report from the Reshoring Initiative. About 36% of surveyed OEMs have reshored or are actively doing so, up from 29% last year, while 63% plan investments in reshoring or domestic expansion. Tariffs, geopolitical risks, and shorter delivery times are the biggest reasons for making the move. Reshoring can improve speed to market, delivery performance, and freight costs, but manufacturers also face higher labor and overhead expenses, worker shortages, and gaps in domestically produced components. Meanwhile, 31% of OEMs have no plans to reshore, per the survey. The biggest concern is policy uncertainty, cited by 57% of respondents. Manufacturers say predictable trade policies are critical because they can plan around known costs but struggle when tariffs keep changing.
• An infusion of federal dollars could help small and midsize manufacturers get more help adopting technologies that might otherwise be difficult or expensive to implement, Manufacturing Dive reports. The National Institute of Standards and Technology (NIST) is awarding more than $30 million to 12 Manufacturing Extension Partnership (MEP) centers in 11 states (including Ohio, Georgia, and Massachusetts) and Puerto Rico. The centers will help manufacturers adopt artificial intelligence, robotics, automation, additive manufacturing, and other advanced technologies. For domestic manufacturers, the programs could provide access to expertise and resources that help improve productivity, address labor challenges, modernize production, and remain competitive. The centers will also work with leading manufacturers in priority industries, potentially creating partnerships and strengthening domestic supply chains. The initial awards only cover the first year of projects, with additional funding dependent on performance and federal funding availability. Participating MEP centers must provide at least a 50% nonfederal match.
• US manufacturing expanded for the seventh consecutive month in July, with the Institute for Supply Management's Purchasing Managers' Index (PMI) rising to 55.6 (up 2.3 percentage points from June), signaling broad-based growth in factory activity, Manufacturing Dive reports. Production, new orders, employment, and export orders all increased, while customer inventories remained low, supporting expectations for continued manufacturing output. Four of the six largest manufacturing industries – transportation equipment, machinery, computers and electronics, and food, beverage and tobacco products – reported expansion per the PMI report. Although manufacturers continued to face pricing volatility, geopolitical tensions, tariffs, and longer supplier lead times, input cost pressures eased modestly from June. Overall, the report points to improving business conditions, stronger demand, and increased hiring, providing a favorable outlook for the US manufacturing sector despite ongoing supply chain and cost challenges.
• US manufacturers are increasingly adopting agentic AI to automate complex workflows such as predictive maintenance, quality inspection, production scheduling, and supply chain management, but widespread deployment remains limited by poor data quality and outdated infrastructure, Manufacturing Dive reports. Deloitte reports that 87% of manufacturers have launched at least one generative AI pilot, and many are now exploring agentic AI to create self-optimizing operations. However, only one in five companies currently has the infrastructure needed for large-scale deployment, while Gartner warns more than 40% of agentic AI projects could be abandoned by 2027 due to high costs, integration challenges, and unclear returns. As a result, manufacturers are investing more in data analytics and industry-specific AI applications, with predictive maintenance, machine vision, and workflow automation emerging as the most practical near-term uses to improve productivity, reduce downtime, and enhance operational efficiency.

Industry size & Structure

The manufacturing sector comprises about 284,450 establishments that employ 12 million workers and generate $7 trillion in annual revenue, according to government sources.

• The manufacturing sector represents about 11% of US Gross Domestic Product (GDP) and employs 7.5% of the nation's workers.
• The sector is fragmented, with the 20 largest manufacturing firms representing just 18% of revenue
• By subsector the largest manufacturing employers are: food manufacturing, 1.8 million workers (14% of total manufacturing employment); transportation equipment manufacturing,1.7 million workers (13.5%); fabricated metal product manufacturing, 1.4 million workers (11%), and machinery manufacturing, 1.1 million workers (8.7%).
• The US manufacturing sector is forecast to grow its employment base from 12.94 million workers in 2023 to 13.1 million in 2033, an increase of 0.8%, according to the Bureau of Labor Statistics.
• About 415,000 manufacturing jobs were unfilled in June 2025, according to the Bureau of Labor Statistics.
• Transportation equipment manufacturing is the largest manufacturing industry in the nation and 16 states, while food manufacturing leads in 19 states and the District of Columbia.
• Automation and robotics are reshaping the industry, with over 44,000 industrial robots installed in US factories in 2022 alone.