US Manufacturing Sector NAICS 31-33

Feb 20, 2026 - US Manufacturing in Retreat

• US manufacturing firms are facing a deepening slowdown despite promises of a renewed industrial boom from the Trump administration, The Wall Street Journal reported in February. Employment declined for eight consecutive months following the introduction of new tariffs, contributing to more than 200,000 lost manufacturing jobs since 2023. Factory activity has contracted for over two years, and manufacturing construction, previously boosted by federal incentives for chips and clean energy, also declined throughout Trump’s first nine months in office. For manufacturers, tariffs are raising input costs on steel, aluminum, and imported components, forcing firms to raise prices, delay investments, or source tariffs‑hit materials from abroad when domestic supply falls short. Frequent tariff threats and uncertainty over potential Supreme Court rulings have created what executives described as a “lost year” for capital planning. Moreover, global oversupply, especially from China, continues to depress prices, squeezing competitiveness.
• The US manufacturing sector logged seven consecutive months (April-November) of job losses following President Trump’s April 2025 “Liberation Day” tariffs, which were intended to boost domestic production and hiring, MSN reported in January. In an interview with CNN, Kevin Hassett, director of the National Economic Council, acknowledged the decline, but argued that new factory groundbreakings, about 30 since September, would generate jobs in 2026. However, commentators like Brian Allen note that manufacturing workers continue to face layoffs despite pro‑manufacturing rhetoric, calling the trend economic deterioration rather than renewal. Data cited by CNN reinforces the concern: industries dependent on manual labor have been cutting jobs throughout 2025, with Bureau of Labor Statistics figures showing sustained losses across traditional blue‑collar sectors. Analysts warn that the broader economy cannot be considered healthy if manufacturing employment continues to shrink, raising questions about the effectiveness of current trade and industrial policies.

• Several mega‑projects scheduled for 2026 signal rising investment in US manufacturing despite a recent dip in overall manufacturing construction spending and the cancellation of $32 billion in clean‑energy projects, Manufacturing Dive reports. Federal incentives, especially CHIPS Act funding and state tax credits, are driving a new concentration of high‑value manufacturing capacity across semiconductors, autos, and pharmaceuticals. Micron’s $200 billion multistate expansion, Samsung’s $17 billion Texas fab, and TSMC’s previously announced $100 billion US buildout collectively will strengthen domestic chip supply chains and create tens of thousands of direct and indirect jobs, while boosting demand for construction materials, automation systems, and industrial equipment. Stellantis’s $13 billion investment across four states accelerates domestic vehicle and EV‑related production, while Lilly’s $27 billion pharmaceutical buildout expands domestic drug‑ingredient and biologics capacity. For the manufacturing sector, the impact is broad: stronger regional manufacturing hubs, deeper supply‑chain localization, increased demand for skilled labor, and long‑term opportunities tied to capital equipment, components, and industrial services.
• Producer prices for all US manufacturing industries rose 3.3% in November compared to a year ago, after posting a flat previous November-versus-November annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by manufacturing companies shrank 0.6% year over year in December, while average sector wages rose 4% over the same period to another new high of $29.60 per hour, BLS data show. While wages at manufacturing companies have risen sharply in recent years, employment by the sector has declined by more than 200,000 roles since 2023, with fewer Americans working in the sector than at any point since the pandemic ended.