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.

Oct 20, 2026 - Layoffs Announced Amid Overall Rise in Employment

• US manufacturers announced thousands of layoffs and facility closures in September, highlighting uneven conditions across the industry, according to an October report from Manufacturing Dive. Companies including Bristol Myers Squibb, Dreyer's, MasterBrand Cabinets, and Carry-On Trailer notified state governments of planned job cuts and operational changes, many scheduled to begin this fall or during the first half of 2027. Despite the announcements, US manufacturing employment increased by 9,000 jobs in September, although that was 40% fewer than in August, according to the Labor Department. Manufacturing unemployment also fell to 423,000 workers from 571,000 a year earlier. The mixed trends suggest that while some manufacturers continue hiring, others are cutting costs and adjusting production capacity. Layoffs and plant closures could also reduce demand for industrial suppliers and equipment manufacturers.
• 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.
• Producer prices for all US manufacturing industries jumped 12.8% in September compared to a year ago, after rising a comparatively modest 3.4% in the previous September-to-September annual comparison, according to the latest US Bureau of Labor Statistics data. Year-to-date, the Producer Price Index for manufacturers has risen sharply to its current record high, driven by soaring energy prices, particularly gasoline, diesel fuel, jet fuel, and crude oil. Meanwhile, employment by manufacturing companies remained flat year over year in September, while the average sector wage rose 3.2% over the same period to $30.19, easing from its peak in July, BLS data show.

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.