The National Association of Manufacturers (NAM) released its Q1 2026 Manufacturers’ Outlook Survey on Mar. 13, showing that while optimism among manufacturers is rising, trade uncertainty remains a top concern as the United States–Mexico–Canada Agreement (USMCA) undergoes review.
The findings are significant as many manufacturers depend on Canada and Mexico for critical supply chain components, making stable trade relations essential for their operations. The USMCA, which replaced NAFTA in 2020, is now subject to a mandatory six-year review to determine whether it should be extended.
According to the survey conducted from Feb. 10–26, before the start of the Middle East war that could impact North American trade through higher energy prices and supply chain disruptions, 75.3% of manufacturers reported a positive outlook for their company—an increase of 5.4 percentage points from the previous quarter. Half of those utilizing Canada or Mexico rely on both countries for critical inputs, with most U.S. imports from these nations consisting of industrial inputs such as machinery and raw materials. Canada and Mexico also account for one-third of U.S. manufactured goods exports—more than the next nine trading partners combined.
NAM President and CEO Jay Timmons said on Wednesday, “Manufacturers are ready for liftoff, but the skies need to clear. This quarter shows a mixed bag of results with real momentum from tax reform, regulatory rebalancing and energy policy.” He added, “At the same time, the results underscore how essential durable supply chains are to manufacturing success—and how critical Canada and Mexico are to that system, which is why we need to preserve and strengthen the USMCA.”
NAM Chief Economist Victoria Bloom said, “For the first time since 2023, manufacturers’ outlook topped the historical average of 74.3%, and manufacturers expect most indices to improve meaningfully over the next 12 months. Sales and production are projected to rise 3.8% and 3.5%, respectively… However, challenges persist. For example, raw material and other input costs are not anticipated to slow… ranking as the third-highest business concern at 57.5%.”
Key findings include: trade uncertainties were cited by 70.6% of manufacturers as a top challenge for five consecutive quarters; more than half secure critical inputs from either Canada or Mexico; rising health care costs remain another major concern.
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Looking ahead, NAM will continue releasing quarterly updates on manufacturer sentiment as developments in global events may further influence North American trade dynamics.
