Machine Shops NAICS 332710

Dec 18, 2025 - Tighter Conditions for Machine Shops

• US factory activity slowed to a four‑month low in November as tariffs pushed input prices higher and softened demand, leading to a buildup of unsold goods, the Institute for Supply Management reports. For machine shops, this environment signals tightening conditions. Slower new orders mean reduced demand for machined components, especially from OEMs facing their own inventory backlogs. Rising input costs driven by tariffs further squeeze margins for shops already dealing with elevated materials and labor costs. The University of Michigan’s Surveys of Consumers also showed a sharp drop in consumer buying conditions for durable goods, a key downstream sector for many machine shops. This suggests weaker order pipelines heading into 2026. While services activity strengthened, manufacturing remains pressured, limiting near‑term recovery prospects. Overall, machine shops should expect slower order flow, longer sales cycles, and continued cost pressures, making operational efficiency and customer diversification increasingly important.
• US machine shops and other manufacturers ordered $493.1 million in new capital equipment during September, down 7.2% from August, but up 11% compared to a year ago, according to the latest data from the Association for Manufacturing Technology (AMT). Through nine months of ordering activity, demand for manufacturing technology was 17.3% higher than the comparable figure for 2024, totaling $3.93 billion. September’s order total was the highest in three years, driven by strong growth in order values, while the number of units ordered grew at a slower pace. Indeed, September 2025 had the second-lowest number of units ordered during a September since 2009, per AMT. The association observed the rise in order value amid falling unit sales could be caused by the growing significance of automation in machine tool design, though AMT pointed to a lack of current BLS data to confirm that observation for September.

• The Commerce Department in September launched an investigation to determine the effects on national security of imports of robotics and industrial machinery, according to a notice in the Federal Register. The probe, opened under Section 232 of the Trade Expansion Act, will examine the national security implications of imports of a wide array of industrial equipment, including robots and programmable, computer-controlled mechanical systems, turning and milling machines, grinding and deburring equipment, and industrial stamping and pressing machines. Other items included are automatic tool changers, jigs and fixtures, and machine tools for cutting and welding. The department is seeking information on domestic production and demand, the role and risks of major foreign exporters, and the impact of foreign government subsidies and trade practices on the robotics and industrial machinery markets.
• Producer prices for machine shops rose 1.9% in September compared to a year ago, after rising 2.1% in the previous September-versus-September annual comparison, according to the latest US Bureau of Labor Statistics data. Industry producer prices, which have been rising steadily since mid-2021, were near an all-time high in September. By comparison, employment by machine shops continued on its downward trend, shrinking 1.3% year over year in August, while the average industry wage rose by 1.4% over the same period to $28.07 per hour, easing from its high in July, BLS data show. Machine shops have been hiking wages to attract and retain skilled workers amid the skilled labor shortage in the US manufacturing sector.