News & Insights

The NFIB Small Business Optimism Index edged up 0.1 point to 95.9 in April, remaining below the 52-year average of 98. April’s increase was due to improvements in most indices, with the largest uptick in earnings trends, which were partially offset by a notable decline in expected business conditions. Of the 10 components included in the index, seven increased and three decreased. Meanwhile, the Uncertainty Index fell 4 points to 88, still well above the 51-year average (68) and above the average since 2016 (80).

Labor quality was cited as the top concern for small business owners, with 18% reporting it as the most important problem, up 3 points from March. Among respondents, 34% reported they were struggling to fill jobs and 53% were hiring or trying to hire in April, both up from March. The share of business owners reporting taxes as the top problem fell 2 points from March to 17%. Meanwhile, inflation ranked third in the list of concerns, with 16% reporting it as their top problem, up 2 points from March, with a net 30% of owners raising prices.

A net 30% of small business owners reported raising compensation, down 3 points in April after moving down 1 point in March. Meanwhile, 18% of business owners plan to increase compensation in the next three months, unchanged from March. Pressure on profitability weakened in April, with positive profit trends rising 6 points from March to a net negative 19%. Among owners reporting lower profits, 33% blamed weaker sales, 15% mentioned usual seasonal changes, 13% cited rising material costs, 9% noted labor costs and the same percentage mentioned price changes on their products or services. Meanwhile, 3% of owners reported that their last loan was harder to get than previous attempts, down 2 points from March, and a net 2% of owners cited paying a higher interest rate on their most recent loan, up 5 points from the prior month.

The outlook for general business conditions declined 7 points to 4%, in line with the historical average. Furthermore, expectations for better business conditions are down 11 points from April 2025. At the same time, 7% reported that it is a good time to expand their business, down 4 points from March and a weak reading compared to times of economic expansion. Overall, small business owners remain relatively pessimistic about the outlook as expected business conditions fell for the fourth consecutive month and to its lowest level since October 2024.

Manufacturing activity in New York state expanded in May, with the headline business conditions index rising 8.6 points to 19.6, the highest reading since April 2022. The new orders index increased 3.4 points to 22.7, while the shipments index declined 1.3 points to 18.9, both remaining at high rates of growth for the second consecutive month. Unfilled orders decreased 4.2 points to 4.9, while inventories moved up 4.6 points to 9.7, indicating business inventories are growing at a faster pace. Delivery times lengthened to a four-year high, climbing 8.3 points to 20.4, and supply availability worsened slightly, edging down 0.6 points to -10.7.

Employment increased at a slower rate in May, with the index for the number of employees falling 1.5 points to 8.3. At the same time, the average employee workweek declined to 11.5 from 13.7, signaling a smaller increase in hours worked in May. The prices paid index jumped 11.6 points to 62.6, while the prices received index soared 10.0 points to 31.8, reflecting the fastest pace of increase in both prices paid and prices received since 2022.

In May, firms’ optimism regarding the future improved notably, with the future business activity index rising 13.9 points to 33.5. In the next six months, new orders are expected to rise at a faster pace compared to the prior month at 30.1. The future employment index moved up 2.5 points to 20.6, suggesting an anticipated faster pace of employment growth over the next six months. Meanwhile, input and selling price expectations are forecasted to increase at a faster pace, rising from 61.6 to 62.1 and from 38.6 to 43.6, respectively. Furthermore, capital spending plans strengthened in May, increasing from 13.1 to 15.5.

U.S. import prices increased 1.9% in April, after rising 0.9% in March, with higher fuel and nonfuel prices driving the increase. Over the year, import prices advanced 4.2% in April, the largest 12-month increase since October 2022. Meanwhile, U.S. export prices stepped up 3.3% in April, driven by higher prices for nonagricultural and agricultural exports. Over the past year, export prices rose 8.8%, the largest over-the-year increase since September 2022.

In April, U.S. import prices for manufacturing moved up 3.5% over the year, although about half of the industry experienced price decreases. Petroleum and coal products manufacturing experienced the most significant over-the-year U.S. import price increase in April, surging 38.4%. On the other hand, the greatest yearly decline in U.S. import prices occurred in beverage and tobacco product manufacturing, which fell 11.2% from April 2025. Meanwhile, U.S. export prices for manufacturing advanced 6.9% over the year, with petroleum and coal products manufacturing exhibiting the largest rise (30.8%).

Fuel import prices climbed 16.3% in April, the largest monthly rise since March 2022, after increasing 10.0% in March. Higher prices for petroleum more than offset lower prices for natural gas. Import prices for petroleum and petroleum products jumped 19.0% in April. At the same time, prices for fuel imports surged 20.0% from April 2025. Meanwhile, natural gas prices plummeted 22.1% in April but edged up 0.1% over the year.

Nonfuel import prices increased 0.8% in April, after ticking up 0.2% in March. Higher prices for capital goods, nonfuel industrial supplies and materials, consumer goods and foods, feeds and beverages drove the increase. The price index grew 2.9% over the past year, the largest over-the-year gain since October 2022.

After rising 0.6% in March, agricultural export prices rose 1.6% in April. Over the past 12 months, agricultural exports advanced 4.3%, driven primarily by higher prices for soybeans and meat. Meanwhile, nonagricultural exports stepped up 3.4% in April. Higher prices for nonagricultural industrial supplies and materials, capital goods and consumer goods more than offset lower prices for automotive vehicles, parts and engines. Over the past year, nonagricultural export prices climbed 9.3%.

Industrial production rose 0.7% in April, while manufacturing output advanced 0.6% after ticking up 0.1% in March. At 97.9% of its 2017 average, manufacturing production increased 1.3% from April 2025. Capacity utilization for manufacturing was 75.8%, up 0.4 percentage points from March and 1.1% over the past year. Capacity utilization remained 2.4 percentage points below its long-term average from 1972 to 2025.

In April, production for most major market groups improved. Consumer goods production climbed 0.9%, while business equipment output jumped 1.5%. The growth in consumer durables (up 1.2%) was led by the output of automotive products rising 2.2%. Meanwhile, the index for consumer nondurables moved up 0.9%, led by an increase in the index for energy (up 2.6%). Among business equipment, the 4.2% jump in transit equipment output led the advance. At the same time, the index for materials rose 0.5%, while the index for construction supplies stayed the same and the index for business supplies ticked up 0.3%.

Durable goods manufacturing surged 1.2% in April and 3.2% from the year prior. The largest monthly gain occurred in motor vehicles and parts (up 3.7%), while furniture and related products registered the largest decline (down 1.8%). Meanwhile, led by a 2.2% decrease in apparel and leather production, nondurable manufacturing edged down 0.1% in April and 0.6% from April 2025.

The Producer Price Index for final demand (also known as wholesale prices) rose 1.4% over the month in April, up from the 0.7% increase in March. Over the year, producer prices jumped 6.0%, up from 4.3% in March and the largest 12-month increase since December 2022. Meanwhile, prices for final demand excluding foods, energy and trade services advanced 0.6% over the month in April after ticking up 0.2% in March. Prices for these goods climbed 4.4% from April 2025, the largest yearly increase since February 2023.

Within final demand, prices for services jumped 1.2% in April, the largest monthly increase since March 2022, after inching up 0.2% in March. Meanwhile, prices for goods soared 2.0% in April, after moving up 1.9% in March. Within the final demand services index, margins for machinery and equipment wholesaling rose 3.5%, a major factor in the monthly advance for this index. Within the final demand goods index, prices for gasoline surged 15.6%, accounting for over 40% of the April increase. At the same time, prices for nonferrous metals fell 0.3% from March but were still up 35.6% from April 2025.

Prices for processed goods for intermediate demand rose 2.7% in April, the sixth consecutive increase, after moving up 2.8% in March. Within the index, prices for diesel fuel jumped 12.6%, accounting for nearly a quarter of the April increase, after soaring 42.1% in March. Meanwhile, prices for primary nonferrous metals and secondary nonferrous metals were up 82.1% and 38.1% year-over-year, respectively. Over the year, prices for processed goods for intermediate demand rose 9.4%, the largest annual increase since October 2022.

Meanwhile, prices for unprocessed goods for intermediate demand climbed 4.1% in April, the sixth straight advance, after increasing 1.8% in March. Nearly 75% of the monthly rise was attributed to an 11.3% surge in crude petroleum prices, which are up 61.8% over the year. In contrast, prices for nonferrous scrap fell 4.4% in April but rose 27.9% from April 2025. Over the year, prices for unprocessed goods for intermediate demand soared 20.9% after moving up 12.5% in March.

In April, consumer prices increased 0.6% from March and 3.8% over the year, up from the 3.3% annual rise in March and the greatest over-the-year increase since May 2023. Core CPI, which excludes more volatile energy and food prices, rose 0.4% from March and 2.8% over the year, up slightly from the 2.6% 12-month increase the month prior.

Energy costs climbed 3.8% over the month in April, after jumping 10.9% in March. Over the year, energy costs surged 17.9%, after increasing 12.5% year-over-year in March. Within the energy index, gasoline prices rose 5.4% in April and 28.4% over the year, while fuel oil prices surged 5.8% month-over-month and 54.3% year-over-year. Meanwhile, electricity prices grew 2.1% in April and 6.1% from April 2025, while natural gas prices edged down 0.1% over the month but were still up 3.0% over the year.

In April, food prices advanced 0.5% over the month and 3.2% over the year, up from the 2.7% year-over-year advance in March. Prices for food at home increased 0.7% from March and 2.9% from April 2025, while prices for food away from home moved up 0.2% month-over-month and 3.6% year-over-year. Of the different food groups, beef and veal, coffee and fresh vegetables rose at the fastest pace, surging 14.8%, 18.5% and 11.5% over the year, respectively.

The shelter index climbed 0.6% from March and 3.3% over the year, up from the 3.0% annual gain in March. Meanwhile, prices for used cars and trucks stayed the same over the month but declined 2.7% over the year, while new vehicle prices ticked down 0.2% over the month but inched up 0.2% from April 2025. Relatedly, prices for motor vehicle maintenance and repair fell 0.2% month-over-month but advanced 5.1% year-over-year.

The headline inflation rate is still well above the Federal Reserve’s target of 2.0% and continues to rise from its 2025 lows, with increased pressure from the war in the Middle East. Federal Reserve officials held their interest rate target steady at their April meeting, and markets anticipate that the Federal Open Market Committee will keep its interest rate target unchanged again at the meeting next month as risks to the Federal Reserve’s inflation mandate rise.

Washington, D.C. – Following the release of surface transportation reauthorization bill text by House Transportation and Infrastructure Committee Chairman Sam Graves and Ranking Member Rick Larsen, NAM Executive Vice President Erin Streeter released the following statement:

“Chairman Graves and Ranking Member Larsen understand the importance of modern, reliable infrastructure to strengthening manufacturing in the United States, creating more jobs and keeping our country globally competitive. The highway bill released today reflects the needs of America’s manufacturers, including tremendous progress toward comprehensive permitting reform, and our industry looks forward to working with the committee to quickly advance this vital legislation.

“Highway congestion and port delays alone are costing manufacturers nearly $40 billion annually and freight delays account for 65 million hours of lost efficiency each year. By passing a robust surface transportation reauthorization bill and bipartisan, comprehensive permitting reform this year, Congress can take a major step forward to reduce congestion, improve reliability, and empower manufacturers to make and move products that reach millions worldwide—supporting communities here at home.”

Background

As Politico first reported in April, the NAM called on Congress to make the next surface transportation reauthorization a robust $600 billion investment.

In February, the NAM launched “Building to Win,” a national campaign urging Congress to pass robust infrastructure investments and reauthorize critical federal highway programs. As part of the campaign’s launch earlier this year, the NAM released a roadmap outlining four pillars for a robust surface transportation reauthorization:

• Continuing robust investment levels for federal infrastructure, including by developing long-term solutions for Highway Trust Fund solvency
• Strengthening supply chains across transportation modes
• Investing in water infrastructure that will support manufacturing growth and public health
• Reforming burdensome permitting laws and regulations to ensure federal infrastructure investments are made efficiently and responsibly

The NAM’s policy roadmap also features original analysis:

• The NAM’s analysis shows that highway congestion costs manufacturers more than $25 billion annually and results in over 65 million hours of delays in freight carrying finished goods and critical inputs each year.
• The analysis also visualizes, through a new map, key logistics nodes intersecting with the nation’s 25 worst freight bottlenecks, revealing more than 2 million hours of annual delays incurred and faced by manufacturers.
• In addition, the NAM estimates that congestion at container and bulk ports cost manufacturers more than $13 billion annually in carrying costs and demurrage charges.

In March, the NAM and the Foundation for American Innovation released a report showing America’s broken permitting system costs manufacturers in America at least $7.9 billion each year.

-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 $2.96 trillion to the U.S. economy annually and accounts for nearly 52% 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.

NAM: Sen. Daines, H.R. 1 permanently extended the Section 199A pass-through deduction, preventing the substantial tax increase that would have hit small manufacturers at the start of 2026. You have been among the Senate’s most persistent champions of pass-through businesses since the Tax Cuts and Jobs Act was enacted. What does achieving permanency mean for small manufacturers in Montana and across the country? 

Sen. Daines: Our small businesses and manufacturers are the backbone of our country’s economy, driving growth and investment across states like Montana. Since I entered Congress, I prioritized the need to protect this industry and warned of what a less competitive America looks like. 

I championed the small business deduction in 2017, and last year, I led the charge on making sure this and other pro-growth provisions became permanent. Clarity and certainty are two of the most important things these job creators need to be as successful as possible, and making 199A permanent delivered both.

NAM: You introduced the Main Street Tax Certainty Act specifically to make the 199A deduction permanent. H.R. 1 accomplished that goal. How did your legislation and sustained advocacy help build the political and policy case for permanency in the reconciliation package, and were there particular provisions in the final bill—beyond the basic permanency—that reflect your priorities for pass-through manufacturers? 

Sen. Daines: As important as it was to make sure this provision was included in 2017, it was imperative we avoided the steep tax increase small businesses and manufacturers faced if we let this expire. Since the day the TCJA was signed into law, we pushed to make this provision permanent. Businesses from every state came in and helped us tell the story of what this means for them. When the time came to draft the Working Families Tax Cuts, the Main Street Tax Certainty Act was one of the most co-sponsored bills in the Senate. We had nearly all Republican senators on that bill advocating for its inclusion in final passage, and we achieved exactly that.

NAM: The Senate Finance Committee conducted detailed working group discussions ahead of H.R. 1. What arguments proved most decisive in the Senate debate over 199A permanency, and are there remaining gaps or unresolved issues in the tax treatment of pass-through manufacturers that you believe should be addressed in future legislation? 

Sen. Daines: Good policies are easy to defend, and the economic data behind 199A spoke for itself. Pass-through businesses employ more than half of private–sector workers, [and] more than 96% of businesses in our country are organized as pass-throughs. The deduction itself is directly responsible for 2.6 million jobs and $325 billion of the United States’ GDP. Many of these businesses are manufacturers who are the backbone of our competitiveness. A successful manufacturing industry supports the American economy and helps protect us against foreign adversaries.

NAM: Manufacturers appreciate your passion and persistence in securing the 199A deduction for the long term. What can our members do to help ensure the benefits of this provision reach every small manufacturer across the country? 

Sen. Daines: We can see economic data and how policies will broadly operate, but hearing firsthand from businesses [that] have utilized those policies to reinvest and grow makes all the difference. We wouldn’t have been able to get nearly our entire conference onto the Main Street Tax Certainty Act if we didn’t have stories from each state to point to.

Washington, D.C. – Following the Environmental Protection Agency’s decision to issue new guidance clarifying the agency’s review process of Clean Air Act title V permits, National Association of Manufacturers President and CEO Jay Timmons issued the following statement:

“Manufacturers consistently cite Clean Air Act permits as among the most burdensome and unpredictable approval processes they face. With this action, the EPA is taking an important step toward modernizing and streamlining a permitting system that too often delays investment and growth, while maintaining environmental protections.

“For too many projects, our permitting system has delayed routine investments with duplicative reviews and unnecessary uncertainty. This new guidance will help ensure EPA and state permit reviews move forward efficiently while preserving opportunities for public input and maintaining appropriate emissions controls. That means manufacturers can move more quickly to break ground on new projects, invest in new technologies and strengthen the energy and industrial infrastructure American communities rely on.

“The EPA continues to act with urgency to modernize a broken permitting process costing manufacturers at least $7.9 billion every year.”

-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 $2.96 trillion to the U.S. economy annually and accounts for nearly 52% 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. 

733 10th St. NW, Suite 700 • Washington, DC 20001 • (202) 637-3000

 Manufacturers’ Stories Highlight Advantages of Landmark Trade Agreement, Illustrate the Need for Improvements Ahead of North American Manufacturing Conference

Washington, D.C. – As manufacturers, policymakers, congressional leaders and business leaders across North America convene in Washington, D.C., for the North American Manufacturing Conference today, a new report released by the National Association of Manufacturers underscores the United States–Mexico–Canada Agreement as a foundation for manufacturing dominance in the U.S.—the most pro-U.S. manufacturing trade agreement in history, with exports to Mexico and Canada already supporting 2 million American jobs. With targeted improvements to this agreement, the USMCA can deliver even more jobs, growth and innovation across the sector.

The report, “Built to Spec: USMCA Supports Millions of American Jobs and Drives U.S. Manufacturing Dominance,” illustrates manufacturers’ stories on how much the USMCA has benefited manufacturing in the U.S. The report combines these stories with data on the depth of North American manufacturing integration. The U.S., Mexico and Canada account for 30% of global GDP.

Since the USMCA was ratified, 15 out of 18 manufacturing sectors have increased exports to Canada and Mexico. Companies across the manufacturing sector have boosted investment and expanded hiring. Rheem Manufacturing said capital investments nearly quadrupled to $100 million following negotiation of the agreement, while Thermo Fisher Scientific recently announced a $2 billion U.S. investment that includes $1.5 billion to expand U.S. manufacturing operations. Manufacturers are also creating jobs and growing their workforce, with Amphenol Corporation noting it has “more jobs across our factories in the U.S. today than we had five years ago,” and Humtown adding “machines and personnel” to support increased exports to Canada and Mexico.

The landmark agreement also strengthened customs procedures, harmonized regulations, increased protections for intellectual property rights and delivered other pro-manufacturing improvements—making North America the most attractive region to manufacture and driving real gains for America’s manufacturers.

“The USMCA is a proven engine for America’s manufacturing strength, ensuring that more products bear the imprint ‘Made in America,’” said NAM President and CEO Jay Timmons.  “Under President Trump’s signature trade agreement, manufacturers have moved production and investments away from Asia to the United States and the rest of the North American market. This report shows that the USMCA has been an anchor for manufacturing investment and expansion in the U.S.—supporting job creation and export growth to the region.

“In his first term, President Trump asked manufacturers to support the USMCA, and we have been proud to do so every step of the way. We partnered with the president and Congress to drive the USMCA into law and supported the negotiations to deliver a winning deal for the American people. We kept our promises to use the USMCA’s provisions to fortify the American supply chain, power more American jobs and drive more American growth. Now is our chance to double down on behalf of the American people. Let’s preserve the USMCA, strengthen it and lead with it—creating more jobs and expanding production for the United States.”

The report features testimonials from manufacturing companies across different manufacturing sectors, including CNH, Unicorr, Advanced Superabrasives Inc., Brunswick Corporation, Dragonfly Energy, American Textile Company, Amphenol Corporation, Hydro, Thermo Fisher Scientific, Dauch Corporation and more. Regardless of type or size, these companies cited clear examples of the USMCA’s advantages to manufacturers:

• Flexibility and speed through proximity
• Access to critical manufacturing inputs
• A unique co-production model that leverages regional assets
• Access to greater sales across North America and the world
• A larger talent pool to address workforce shortfalls in the U.S.
• Resiliency against global tensions

“The results are clear: the USMCA strengthens U.S. manufacturing in the face of threats from fierce global competitors. We can maximize these advantages—putting America’s manufacturers first—by preserving the USMCA while implementing impactful reforms. Because a stronger USMCA means a stronger America.”

Read the full report here.

Read the one-pager 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 $2.96 trillion to the U.S. economy annually and accounts for nearly 52% 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.

733 10th St. NW, Suite 700 • Washington, DC 20001 • (202) 637-3000