Machine Shops NAICS 332710

Jul 18, 2025 - Manufacturing Contracted in June

• US factory activity – a driver of demand for goods produced by machine shops – contracted in June for a fourth consecutive month as new orders and employment shrank at an accelerated pace, Bloomberg reports. The Institute for Supply Management’s manufacturing index inched up half a point in June to 49, according to the latest data. (Readings below 50 indicate contraction.) Weak demand and shrinking order backlogs help explain a faster rate of decline in factory employment. According to the Labor Department, the US manufacturing sector shed 7,000 jobs in June, for a total of 89,000 jobs lost over the past 12 months. The nine manufacturing industries reporting growth in June included (in order) Apparel, Leather & Allied Products, Petroleum & Coal ,and Nonmetallic Mineral Products, while the fabricated metal products industry was among those industries reporting contraction.
• As suppliers to US manufacturers, machine shops benefit from new manufacturing activity created by reshoring and foreign direct investment. Last year, the US manufacturing sector generated 244,000 new jobs as a result of reshoring and FDI activity, according to the Reshoring Initiative’s 2024 Annual Report. The report found that reshoring by US-based businesses exceeded foreign direct investment by the largest margin recorded to date in 2024. The vast majority of new jobs (90%) created by reshoring belong to high- or medium-tech manufacturing sectors, while low-tech industrial jobs remain “under-reshored,” per the report. Industries leading reshoring activity in 2024 were computer and electronics, electrical equipment (including EV batteries and solar), and transportation equipment, with Texas, South Carolina, and Mississippi the top states for reshored operations. Tariffs are rising as motivation for reshoring decisions – up by 454% in 2025 over 2024 – the Reshoring Initiative reports.

• While President Trump promises tariffs will be a boon for American manufacturing, in the short term, at least, tariffs are making life harder for US manufacturers, the National Association of Manufacturers reports. The president of Ohio-based copper wire products maker Republic Wire told the Cincinnati Enquirer that while he understands what the administration is trying to achieve with tariffs, “Higher prices on materials could mean fewer construction projects, which could mean a slowdown for the industry, fewer jobs and a drag on the economy as a whole.” Chuck Daras, president and COO of Michigan automotive manufacturing firm AlphaUSA, wrote in an op-ed “The truth [about tariffs] is that the burden falls squarely on American manufacturers and, ultimately, the American consumer,” adding “If the tariffs remain in place long term, small manufacturers might not be able to hold out long enough to see their promised benefit.”
• Producer prices for machine shops rose 3.2% in May compared to a year ago after rising 0.9% in the previous May-versus-May annual comparison, according to the latest US Bureau of Labor Statistics data. Industry producer prices, which have been rising steadily since mid-2021, reached an all-time high in May. Employment by machine shops declined 3% year over year in April, while average industry wages rose 3.4% over the same period to $27.84 per hour, BLS data show. Machine shops have struggled to hire skilled machinists amid the broader skilled labor shortage in the US manufacturing sector.