Input Stories

As the review of the United States–Mexico–Canada Agreement gets underway, a large majority of manufacturers report they rely on either Canada or Mexico for critical parts of their supply chains, according to the NAM’s Q1 2026 Manufacturers’ Outlook Survey.

• Trade uncertainty remains manufacturers’ top business concern, cited by 70.6% of respondents.
• However, the industry’s optimism is rising, with 75.3% reporting a positive outlook for their companies, up 5.4 percentage points from the previous quarter.

The details: Half of manufacturers who rely on Canada or Mexico for critical parts depend on both countries, out of the more than 80% that source parts from either country, according to the survey.

• The majority of U.S. imports from Mexico and Canada are industrial inputs, such as machinery, equipment and raw materials.
• Canada and Mexico also purchase one-third of U.S. manufactured goods exports—more than the next nine U.S. trading partners combined. 

Concerned about health care: For the second consecutive quarter, rising health care/insurance costs (69.8%) remained the second most-cited business challenge for manufacturers.

The big picture: “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,” said NAM Chief Economist Victoria Bloom.
 
The NAM says: “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.”