U.S. manufacturers are expressing increased concern over trade uncertainties and rising raw material costs, according to the Q1 2025 Manufacturers’ Outlook Survey by the National Association of Manufacturers (NAM). Conducted from February 11 to February 28, the survey highlights that 76.2% of respondents now view trade uncertainties as their primary concern, a significant rise from previous quarters.
The survey also indicates that increased raw material costs are a major challenge for 62.3% of manufacturers. Larger manufacturers tend to be more worried about tariffs and trade wars, while smaller manufacturers focus on the cost of raw materials.
A breakdown by business size shows that 90.1% of large manufacturers (500 or more employees) and 74.4% of medium-sized manufacturers (50 to 499 employees) cite trade uncertainties as their top challenge. In contrast, 60.4% of small manufacturers (fewer than 50 employees) prioritize increased raw material costs, with trade uncertainties following closely at 58.3%.
Despite these concerns, 69.7% of respondents remain positive about their company’s outlook, although this is a slight decrease from Q4 2024's figure of 70.9%. The impending expiration of the Tax Cuts and Jobs Act could impact investment decisions if Congress does not act soon; nearly two-thirds would delay purchasing capital equipment.
NAM President and CEO Jay Timmons emphasized the challenges facing the sector in a social media post: “The pressure of increased costs, trade instability and sluggish demand is dampening the sector’s momentum.” He called for a comprehensive manufacturing strategy addressing trade policy and making tax reforms permanent.
Additional findings reveal expectations for product line price increases averaging 3.6% over the next year, with anticipated rises in raw material prices at their highest since mid-2022. Export sales growth is expected to be minimal at just 0.1%, reflecting cautious optimism among small manufacturers compared to larger ones.
