Economic Data and Growth

Washington, D.C. – As the review of the United States–Mexico–Canada Agreement gets underway, a majority of manufacturers report they utilize either Canada or Mexico for critical parts of their supply chains—at a time when trade uncertainty remains manufacturers’ top business concern, according to the National Association of Manufacturers Q1 2026 Manufacturers’ Outlook Survey. The survey also shows manufacturers’ optimism is rising, with 75.3% reporting a positive outlook for their company, up 5.4 percentage points from the previous quarter.

Among the manufacturers that utilize Canada or Mexico for critical parts of their supply chain, exactly half rely on both countries, according to the latest findings. The majority of U.S. imports from Mexico and Canada are industrial inputs such as machinery, equipment and raw materials while Canada and Mexico also purchase one-third of manufactured good exports—more than the next nine U.S. trading partners combined.

“Manufacturers are ready for liftoff, but the skies need to clear,” said NAM President and CEO Jay Timmons. “This quarter shows a mixed bag of results with real momentum from tax reform, regulatory rebalancing and energy policy. 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.”

“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, up from the previous quarter’s forecast of 2.8% and 2.4% growth,” said NAM Chief Economist Victoria Bloom. “However, challenges persist. For example, raw material and other input costs are not anticipated to slow, rising at the same pace as projected in Q4 (4.1%) and ranking as the third-highest business concern at 57.5%.”

Key findings:

• 70.6% of manufacturers cited trade uncertainties as a top business challenge for the fifth consecutive quarter.
• 54.6% secure critical inputs from either Canada or Mexico—82.2% of those manufacturers say they source raw materials or other inputs from either country.
• Of those that utilize Canada or Mexico, 62.7% benefit from a strong customer base across the border.
• For the second consecutive quarter, rising health care/insurance costs (69.8%) remained the second most-cited business challenge for manufacturers.

The NAM releases these results to the public each quarter. Further information on the survey is available here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.95 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.