US Manufacturing Sector

The 285,500 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.

Aug 20, 2026 - 7th Straight Month of Expansion

• 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production scheduling, and supply chain management, but widespread deployment remains limited by poor data quality and outdated infrastructure, Manufacturing Dive reports.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.
• A year after the Trump administration's "Liberation Day" tariffs, data show no clear evidence of a broad US manufacturing reshoring boom despite numerous corporate announcements to expand domestic production, according to IOT Analytics’ Industrial Macro Pulse May 2026 report. Indeed, total manufacturing construction spending has declined since mid-2024, largely due to a slowdown in semiconductor and electronics factory projects. Excluding electronics, manufacturing construction spending rose modestly, but not at levels consistent with a major reshoring surge. Manufacturing employment has also declined slightly, and import data show limited progress toward reshoring. However, the report notes that US manufacturing conditions are generally healthy, supported by improving factory activity and selective investment in sectors such as chemicals, plastics, and food manufacturing. The strongest industrial growth is occurring in data center construction and related power infrastructure projects, which are generating significant demand for manufacturers of equipment, materials, electrical systems, and industrial components.
• Producer prices for all US manufacturing industries rose 8.1% in July compared to a year ago, after rising a relatively modest 1.5% in the previous July-to-July annual comparison, according to the latest US Bureau of Labor Statistics data. Despite falling energy prices in July from June, manufacturing producer prices remained sharply higher than a year earlier. Meanwhile, employment by manufacturing companies remained flat year over year in July, while the average sector wage rose 4.2% over the same period to a new high of $30.39 per hour, BLS data show.

Industry size & Structure

The manufacturing sector is comprised of about 285,000 establishments that employ 12.6 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.