2026 Third Quarter Manufacturers’ Outlook Survey

Manufacturers’ Outlook Survey: Third Quarter 2026

Manufacturers expect costs to continue rising, with raw material and other input costs projected to increase 5.0% over the next year as the conflict in the Middle East and ongoing trade uncertainty continue to pressure supply chains, according to the Q3 Manufacturers’ Outlook Survey. Increased raw material costs remained manufacturers’ top business challenge for the second consecutive quarter, with rising healthcare costs and trade uncertainty rounding out the top three.

Global disruptions are adding to the cost picture. Among manufacturers surveyed about the conflict in the Middle East, 60.6% of respondents said that conditions related to the conflict in the Middle East have not improved from the prior quarter, while 33.2% said challenges have worsened. Transportation costs are also straining supply chains with 77.3% of manufacturers citing freight rates and 74.1% citing fuel costs as challenges. Nearly all respondents (98.6%) rely on trucks to move goods.

Against that backdrop, manufacturers’ optimism continues to tick up, rising from 74.2% in Q2 to 78.9% in Q3, buoyed by expectations for stronger sales. Manufacturers surveyed project sales, production, capital investments and exports to grow at the fastest rate in more than four years over the next 12 months.

To fuel that anticipated growth, nearly two-thirds (63.0%) of manufacturers plan to import industrial machinery (including parts and components) in the next year to support existing or planned manufacturing operations. Of those, 69.2% plan to use the machinery to upgrade or replace existing machinery, while 63.6% mentioned plans to use the machinery for new or expanded operations.

The NAM conducted the Q3 2026 Manufacturers’ Outlook Survey August 11 – 27.

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