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Building permits inched up 0.1% in January but fell 1.7% over the year. Permits for single-family homes in January stayed the same from December but declined 3.4% over the year. Meanwhile, permits for buildings with five or more units fell 1.4% from December but rose 0.2% over the year.

In January, housing starts plunged 9.8% from December and slipped 0.7% from January 2024. Additionally, starts for single-family homes fell 8.4% from December and 1.8% from January 2024. Meanwhile, starts for buildings with five or more units decreased 11.0% from December but improved 2.3% over the year.

On the other hand, housing completions increased 7.6% over the month and 9.8% over the year. Single-family home completions grew 7.1% from December and 8.9% from January 2024. Completions for buildings with five or more units grew 10.1% over the month and 11.8% from one year ago.

The S&P Global Flash U.S. Manufacturing PMI rose slightly from 51.2 in January to 51.6 in February, the sharpest increase since June. Factory production grew for the second consecutive month and at the steepest rate in nearly a year. On the other hand, growth in new orders and employment weakened. Meanwhile, supplier delivery times lengthened for the fifth consecutive month but at the slowest rate since October, indicating busier supply chains.

Overall business sentiment slumped to its lowest point since December 2022, with the exception of last September amid preelection uncertainty. After a post-election boost, optimism has again deteriorated in response to uncertainty regarding federal spending cuts and tariffs. Businesses also expressed concern about higher prices amid manufacturing seeing the largest monthly gain in raw material prices since October 2022. On the other hand, optimism in manufacturing remained elevated compared to recent standards, though it fell from January’s 34-month high.

Consumer sentiment fell for a second month in a row in February, declining nearly 10% from January to an index reading of 64.7. All five components fell this month, led by a 19% drop in buying conditions for durables due to looming tariff anxiety. Both views of personal finances and the short-run economic outlook declined around 10%, while the long-run economic outlook decreased 6%, the lowest reading since November 2023. Sentiment fell for Democrats and Independents but was unchanged for Republicans, revealing ongoing political division and disagreement about new economic policies.

Year-ahead inflation expectations rose from 3.3% to 4.3% in February, the highest reading since November 2023 and well above the pre-pandemic range of 2.3–3.0%. Long-run inflation expectations also edged up from 3.2% to 3.5%, the largest monthly increase since May 2021. Like the trends in broader sentiment, concerns about future inflation trends rose for Independents and Democrats but fell slightly for Republicans.

In February, Philadelphia’s regional manufacturing activity continued to expand but at a slower rate than in January. The index for current general business activity fell from 44.3 to 18.1 but remains above the index’s long-run nonrecession average. Nearly 41% of firms reported increased activity this month, while 22.5% saw decreases in February compared to just 6.6% reporting declines in January. Meanwhile, 34.7% experienced no change. The indexes for new orders and shipments both dropped to 21.9 and 26.3, respectively, but remained above their long-run averages. Additionally, employment expectations remained positive but fell from 11.9 to 5.3. The average employee workweek index dropped from 20.5 to 2.9.

Both price indexes rose to the highest readings in over two years and remain above their long-term averages. The prices paid index increased nearly nine points to 40.5, the highest reading since October 2022, and the prices received index rose more than three points to 32.9. As has been the case for many months, the prices received index remains lower than the prices paid index, indicating manufacturers were absorbing a sizable portion of those higher costs paid.

Looking ahead, all future indicators decreased. The index for future general business activity fell from 46.3 in January to 27.8 in February. A higher proportion of firms (18.5%) expect decreases in activity, compared to last month’s reading of 7.2%, but nearly half (46.3%) still expect activity to improve. Additionally, the future new orders and shipments indexes declined roughly 24 points, to 33.1 and 36.5, respectively. While still positive, the index for future employment dropped from 40.4 to 23.7. The capital expenditures index decreased 25 points to 14.0, the lowest reading since August 2024. The future prices paid index fell nine points to 58.6, while the future prices received index fell eight points to 46.1, indicating manufacturers remain concerned about future costs rising but not as much as before.

Manufacturing activity in New York state improved dramatically in February, with the headline general business activity index rising 18.3 points to 5.7. The new orders index jumped 20.0 points to 11.4, while the shipments index rose 15.9 points to 14.2, reflecting significant improvements in both orders and shipments. Unfilled orders increased to 1.1 from -4.7, and inventories inched up from 5.8 to 8.7. Delivery times lengthened slightly, rising 1.9 points to 5.4, while supply availability was slightly lower, slipping to -2.2 from 0.0.

Employment decreased slightly in February, with the index for the number of employees falling from 1.2 to -3.6. The average employee workweek rose to -1.2, signaling that there was no significant change in hours worked. Both input and selling price increases picked up markedly, as reflected in the prices paid index rising 11.1 points to 40.2, the fastest pace of increase in nearly two years, and the prices received index increasing 10.3 points to 19.6.

Although manufacturing indictors improved broadly and firms still expect conditions to get better over the next six months, manufacturers’ optimism plummeted. The index for future business activity decreased 14.5 points to 22.2. Employment and the average employee workweek are forecasted to weaken slightly. New orders are anticipated to increase, but at a slower rate than previously expected. Meanwhile, supply availability is forecasted to drop significantly.

At the NAM, we’re examining some of the top trends that are shaping manufacturing this year, and offering the resources you need to take action.

Today, we’re taking a look at the industry’s efforts to enable innovation—and how manufacturers are working to stay on the cutting edge.

Applying technology: Digitalization can increase the speed and agility of innovations in areas like prototyping, iteration, simulation and modeling. And by using AI and data analytics to improve decision-making, manufacturers can build resilient, transparent supply chains that are more efficient and effective.

Upscaling workforces: Because of the rapid pace of technological advancement and adoption, manufacturers will have to create a workforce that is ready for the future—and processes designed to transfer knowledge and skills effectively and continuously.

Harnessing partnerships: Manufacturers can lean into collaborations that help to accelerate innovation. By connecting with manufacturing peers, government institutions and academia, industry leaders can develop unique and inventive paths forward.

Expert insight: According to CEO and Co-Founder of Narratize Katie Trauth Taylor, tools like generative artificial intelligence can accelerate and automate manufacturing innovation—with human ingenuity at the helm.

• “Human-led AI methodologies enhance teams’ ability to analyze opportunities, translate complex concepts into compelling business cases and think deeply about their innovative work,” said Taylor. “With reduced documentation and improved communications, product teams can reallocate their time value-generating work—deeper market research, sharper strategy and accelerated development.”

Resources for you: Want to dive deeper? Check out some additional resources from the NAM.

• Explore the Innovation Research Interchange, a division of the NAM that focuses on value creation and top-line growth through the management of innovation.
• Join one of the Manufacturing Leadership Council’s Plant Tours in person—or read summaries of past tours—to get an inside look at how other manufacturers have reshaped processes to advance their businesses.

The NAM kept up a breakneck pace on the third day of its 2025 Competing to Win Tour, with the Manufacturing Institute delivering the first-ever State of the Manufacturing Workforce Address at Drake State Community and Technical College in Huntsville, Alabama, before an audience of students, faculty, manufacturers and local and state officials.
 
Opportunity—for all: Taking the stage to give the MI’s assessment of the manufacturing worker base in 2025, Carolyn Lee, president of the Manufacturing Institute, the NAM’s 501(c)3 workforce development and education affiliate, homed in on the theme of opportunity.

• “Manufacturing is not just about innovation and economic growth; it’s about opportunity. It’s about ensuring that every community, every aspiring maker, builder and creator—no matter their background—can have access to the skills, training and careers that will define the future.”
• But because the industry stands at a crossroads, part of that opportunity today is to help manufacturing maintain its momentum, Lee said, echoing a theme of NAM President and CEO Jay Timmons’ 2025 State of Manufacturing Address on Tuesday.

Finest hours ahead: Lee was joined at the event by Rep. Dale Strong (R-AL), who spoke about the strength of Alabama’s manufacturing sector.

• “I think we’ve proven here in Alabama, and North Alabama especially, advanced manufacturing is part of our DNA,” he said. “You look at the jobs that we’ve brought in the last 10 or 15 years. You start with GE Aviation, Polaris, Toyota Motor Manufacturing, Mazda Toyota. We’ve proven that the Alabama workforce has the ability. I think our finest hours are still ahead.”

A world-changing job: Timmons echoed that sentiment. “You’re stepping into one of the most important and innovative fields in the world,” he told the Drake State students.

• “The products, the materials, the technologies that you will help create, they won’t just be used in your hometown or even all across our country. They’re going to help change economies … They’re going to strengthen the very foundation of America’s security and prosperity.”

A shortfall: But manufacturing today faces an immense challenge, Lee told the crowd: “a structural workforce deficit.”

• “[I]f we don’t act boldly, the U.S. faces a shortfall of 1.9 million manufacturing workers by 2033; 3.8 million positions will open up, but nearly half could go unfilled. That’s not just a workforce issue—it’s an economic and national security issue.”
• That’s despite the average annual earnings—including pay and benefits—for a manufacturing employee coming in at more than $102,000.
• The dearth of workers in the sector is driven by both retirements and growth.

How to overcome it: “[W]e have to inspire more Americans to see themselves in manufacturing,” Lee said. “That starts early, with programs that spark curiosity and excitement for careers in our industry. And when I say early, I mean as young as 9 or 10 years old—because today’s 4th graders will graduate in 2033 and may be our future team members.”

• To this end, the MI partners each year with manufacturers on MFG Day, which kicks off a full month of events at which companies show young people, students and job seekers what a modern manufacturing career looks like.
• The MI, with the support of Honda, has also created a new interactive experience to interest youngsters in the industry: “Innovators Quest,” which combines elements of board games and popular fantasy and storytelling activities.

The FAME factor: Under the MI’s auspices, the Federation for Advanced Manufacturing Education USA, a workforce program started by Toyota in 2010 and entrusted to the MI in 2019, has grown considerably. (Drake State is home to one of the public–private partnership’s newest chapters.)

• FAME participants attend classes and earn while they learn in hands-on apprenticeships with manufacturers.
• The program—in which a participant can easily earn more than $30,000 over two years—has become “the gold standard for how employers, educators and communities should work together” on manufacturing workforce training, Lee said.

Other efforts: The MI helps manufacturers actively recruit groups often overlooked in manufacturing hiring initiatives: veterans, women and previously incarcerated individuals.

• The Heroes MAKE America program helps connect former members of the military with manufacturing jobs. Walmart provides crucial funding to the program; in 2022, it gave a six-figure grant to fund the development of a model that translates skills acquired in the military to ones recognized by manufacturing employers.
• The Women MAKE America Initiative is the nation’s premier program aimed at closing the gender gap in the sector.
• “The MI is helping manufacturers develop second chance hiring strategies, recognizing that talent is talent—and potential shouldn’t be wasted,” Lee said to the audience.

Working together: “As we look ahead, manufacturers, educators and policymakers must work together to strengthen our talent pipeline,” Lee and Drake State Community and Technical College President Dr. Patricia G. Simms wrote in a Thursday op-ed for the Alabama Political Reporter. 
 
Manufacturing in Alabama: On Thursday afternoon, the NAM and MI contingent continued its manufacturing-facility tour, visiting Toyota Motor Manufacturing Alabama and Bruderer Machinery—both in Huntsville—and Milo’s Tea Company in Bessemer.

• “I plan on making my career here,” said Drew, a 2024 FAME graduate, during a discussion before a tour of the shop floor. Drew is now working as a maintenance team member at Toyota Alabama. The talk focused on how the FAME program prepared participants for a rewarding career in auto manufacturing. Toyota Alabama—2,400-plus team members strong—has created 10,000 jobs in the state.
• Lee visited Bruderer Machinery, a leading manufacturer of high-precision stamping presses that provides solutions for the automotive, aerospace and electronics industries. Bruderer is also a key supporter of the FAME apprenticeship model.
• Timmons and the rest of the NAM team finished the day at Milo’s Tea, the fastest-growing tea company in America. The family-owned business, founded by CEO Tricia Wallwork’s grandparents Milo and Bea Carlton, has won 40% of the refrigerated iced tea market share in the U.S. “This reminded me of my grandmother’s iced tea,” said Timmons. “You could see how special Milo’s is by just walking the shop floor and seeing the smiles and camaraderie.”   

Manufacturers need an integrated, comprehensive strategy for expanding their sector, and a large part of that is preserving and bringing back tax reforms, NAM President and CEO Jay Timmons said on CNBC’s “The Exchange” Wednesday.

What’s going on: Timmons spoke to the news channel from a teacher workroom at the Energy Institute High School in Houston, Texas, a stop on the first leg of the NAM’s 2025 Competing to Win Tour. He told show host Kelly Evans that any plans to bolster manufacturing in the U.S. must “start with renewing those tax reforms from 2017.”

• “A smart strategy is going to involve reducing the cost of doing business for manufacturers here in the United States,” he said, praising Republican House leadership for being “able to move” forward a House budget bill “that’s going to set the framework for those tax rates to be set, hopefully, permanently in stone.”
• The 665-student Energy Institute High School, led by Principal Lori Lambropoulos, is the first high school in the U.S. dedicated to preparing students for careers in the energy industry.

What else is needed: Timmons echoed some of the major themes from the NAM State of Manufacturing Address, which he gave Tuesday in Ohio.

• “We also are looking at regulatory reform,” he told Evans. “We’re looking at expanding our energy dominance. We’re looking at workforce policy … and then, of course, we have to have a sensible trade policy as well.”

But back to taxes: Bringing back expired provisions from the 2017 Tax Cuts and Jobs Act, and making them and other, scheduled-to-expire provisions from the legislation permanent, is critical to manufacturing’s future success, Timmons continued.

• “Ninety percent of my 14,000 members are small and medium manufacturers. Most of them benefit from the pass-through deduction that expires this year. And I don’t think what you want to see is a huge tax increase that will cost 6 million jobs in the economy happen if we don’t renew those reforms,” he said, citing data from a recent NAM study on the effects of a congressional failure to act on tax reforms.
• “That’s why the Speaker’s actions in the last day or so have been so incredibly important to get this thing moving forward. President Trump actually endorsed that bill—the ‘one big, beautiful bill,’ as he calls it—and that will help make America great again for manufacturing.”

 Energy dominance: Also critical to the success of manufacturing and the U.S. economy as a whole: the right energy policies, Timmons said. Promising to “unleash the energy sector,” President Trump lifted the previous administration’s ban on liquefied natural gas exports on his first day in office.

• Yesterday, the NAM got to see first-hand some of the effects of that kept promise, when the team visited Freeport LNG’s liquefaction facilities near Houston.
• More than 9,000 construction jobs were created during the construction of those facilities, which now directly employ about 400 people. Their operations have an estimated total positive economic impact on the U.S. economy of more than $5 billion a year.
• “Energy is … a critical national security component,” Timmons said on CNBC.

Emphasis point: The tour also stopped at Bray International, a global leader in flow control and automation solutions, supporting U.S. energy dominance, LNG exports and high-tech manufacturing.

• The visit helped underscore why policies that support manufacturing investment and provide certainty to manufacturers are essential to America’s economic future.

Up next: Today, the NAM is in Alabama, where this morning Manufacturing Institute President and Executive Director Carolyn Lee gave the Manufacturing Institute’s State of the U.S. Manufacturing Workforce Address at Drake State Community & Technical College in Huntsville. (The MI is the NAM’s 501(c)3 workforce development and education affiliate.) The theme: building the workforce of the future.

• This afternoon, the team will tour Toyota Motor Manufacturing Alabama in Huntsville, the manufacturing facilities of Bruderer Machinery in Huntsville and Milo’s Tea Company in Bessemer.

When Siemens sees a feasible way to save resources and improve efficiency, the company takes it. 

Case in point: The global industrial manufacturing and technology business recently opened one of the first all-electric powder coating paint lines for the electrical distribution industry in the U.S., in Grand Prairie, Texas, to cut down on natural gas consumption.

• Siemens wholly replaced the original paint line to an all-electric system, which has reduced natural gas consumption by more than 90%, according to the company.
• “The timing was fortuitous,” said Stacy Mahler, U.S. head of sustainability for Siemens Smart Infrastructure. “We’d done an assessment of [the facility] and saw that our Scope 1 emissions were coming mostly from the paint line, which at 30 years old was due for replacement. The team realized that there was an opportunity to make an investment that would not only modernize the process but also lower the carbon footprint and help to manage the volatility in energy cost.”
• That change—made without interruption to plant operations because the new line was built alongside the old line—is part of Siemens’ larger goal to achieve a net-zero carbon footprint across its operations by 2030. It’s 55% of the way there already.
• Next up: assessing other company facilities globally for the same all-electric upgrade. One outcome of the effort in Grand Prairie is a cross-business team of experts working to replicate success at Siemens’ other facilities, like the newly expanded facility in Pomona, California, while sharing their knowledge with the broader manufacturing community.

Waste not: At its Spartanburg, South Carolina, site, Siemens is extracting and reusing waste oil found in materials on the floor.

• “We’ve partnered with a third-party company that provides the infrastructure within our own facility to take oil from rags and other materials, absorb it and then recycle or downcycle it,” Mahler told the NAM, adding that in the latter, the oil can be made available for other downstream applications.
• The impact is big, recycling about “3,000 pounds of oil-absorbent material that otherwise would have gone to landfill.”

From trash to energy: Siemens has also designated two of its American facilities—the one in Grand Prairie and another in Hingham, Massachusetts—as “landfill-free,” meaning that the sites incinerate all their nonrecyclable waste, producing thermal energy to power operations.

• “We’re taking waste that’s coming out of the facility, and instead of having waste management take it, we partner with a company that extends the useful life of the raw material and prevents it from sitting in a landfill,” Mahler said.
• The two-facility program redirects approximately 1,000 tons of waste each year.

Reusing metals: At its Roebuck, South Carolina, manufacturing center, Siemens uses a wastewater treatment process that recovers metals for reuse.

• The onsite system “extracts valuable metals—including copper, aluminum, tin and iron—from sludge that are a byproduct of painting and fabrication processes,” Mahler said. “These are then recycled instead of sent to the landfill.”
• Siemens recovers about 59,000 pounds of metal annually this way.

Even the windows: Siemens has also slashed energy consumption at its Fort Worth, Texas, facility using a unique type of window.

• Michigan-based glass solutions startup LuxWall recently installed its Enthermal Glass windows throughout the office in the Siemens plant. “The glass operates like a thermos, reducing both emissions and the energy bill,” according to Mahler.
• Installing the windows can cut a building’s emissions by 35% to 40% and reduce cooling costs by 20%, according to LuxWall.
• Siemens has been so impressed with the reductions it’s seen that it has even begun “sharing the product with our suppliers and customers.”

Onward and upward: Chief among Siemens’ sustainability goals for the coming years is “accelerating action across our other U.S. facilities, our supply chain and for the manufacturing sector as a whole,” said Mahler.

• “We’re trying to pave the way, show proof of concept and hopefully remove some of the barriers in the name of sustainability and more efficient operations.”

“Manufacturing in the U.S. has momentum”—and to keep it going, manufacturers will need to push, NAM President and CEO Jay Timmons said Tuesday in the NAM’s annual State of Manufacturing Address.
 
What’s going on: Speaking to an audience of manufacturers and congressional and state officials at Armstrong World Industries in Hilliard, Ohio, Timmons, who was joined by NAM Board Chair and Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer Kathy Wengel, emphasized the “defining moment” for the industry and said that for manufacturing, “what happens next really matters.”

• “Uncertainty is the enemy of investment,” he told the crowd. “Manufacturing is a capital-intensive industry. We make decisions months and years in advance. … That’s why we need certainty. We need a clear, actionable, multistep strategy from our government—one that says, ‘We want you to invest here, hire here and succeed here.’”
• Timmons’ annual speech kicked off the NAM’s 2025 Competing to Win Tour, starting with a whirlwind four-states-in-four-days tour of manufacturing facilities, schools, government offices and more.
• “In Ohio, manufacturers have thrived because our leaders have taken decisive actions to keep our industry competitive,” Ohio Manufacturers’ Association President Ryan Augsburger said at the kickoff event. But now, “manufacturers across Ohio and the nation are facing critical challenges, from tax uncertainty, project delays and workforce shortages to supply chain vulnerabilities and price pressures that threaten our ability to grow. … These issues cannot wait.”

What manufacturing needs: Certainty from the federal government should come in several forms, Timmons said, including the following:

• Preserving tax reform: The 2017 tax reforms were “rocket fuel” for manufacturing in America—but key provisions have expired and others are scheduled to sunset. Congress must bring them back and improve and extend the package. “Every day that Congress delays because of process and politics, manufacturers face rising uncertainty, delayed investments and fewer jobs,” said Timmons.
• Regulatory clarity and consistency: Manufacturers today spend a total of $350 billion just to comply with regulations. “Commonsense regulation is critical to American manufacturers to continue to innovate, to compete against foreign manufacturers and to improve the lives of American citizens,” Austin So, general counsel, head of government relations and chief sustainability officer for Armstrong World Industries, told the crowd.
• Permitting reform: President Trump’s lifting of the liquefied natural gas export permit ban was a start, but to reach our full potential as energy leader, we must require “federal agencies to make faster decisions and reduc[e] baseless litigation,” said Timmons.
• Energy dominance: “America should be the undisputed leader in energy production and innovation. But … we are seeing opportunities for energy dominance fade in the face of a permitting process that takes 80% longer than other major, developed nations,” Timmons said, adding that we must cut red tape, require federal agencies to make faster decisions and reduce meritless litigation.   
• Workforce strategy: By 2033, manufacturing faces a shortfall of 1.9 million manufacturing employees, Timmons said. To fill those positions, the sector needs a “real workforce strategy,” one that includes apprenticeships, training programs and public–private partnerships.
• Commonsense trade policy: If President Trump continues to use tariffs, “we need a commonsense policy … that provides manufacturers with the certainty to invest” and “a clear runway to adjust,” according to Timmons.

State of manufacturing: “Manufacturing in the United States is moving forward,” Timmons said. “Like a press at full speed, like a production line firing on all cylinders, like the workers who show up before dawn and leave long after the job is done—manufacturing in the United States is driving us forward.” And Timmons added that now it’s time “to make America Great for Manufacturing Again.”

On the move: Following the speech, Timmons, Wengel and Augsburger joined state lawmakers, including state Sens. Kristina Roegner and Andrew Brenner, and local business leaders for a visit to the Ohio Statehouse for an event focused on the importance of tax reform for Ohio and its manufacturing sector.

• A recent NAM study found that, if key provisions of tax reform are allowed to expire, Ohio would risk losing 208,000 jobs and $18.9 billion in wages.

What’s at stake: Tax reform was transformational for Humtown Products, the Columbiana, Ohio–based family-owned sand cores and molds manufacturer, President and CEO Mark Lamoncha told the audience at the Ohio Statehouse tax event.

• “We have been at the forefront of 3D-printed manufacturing for years and have invested significantly in the machinery and equipment required, including the purchase of 3D printers—one of which can easily cost over $1 million,” he said.
• “Since the 2017 tax reform, Humtown has invested over $9 million in capital expenditures related to 3D printing and averages around $100,000 annually in R&D costs. Under the 2017 tax reform, we were able to deduct 100% of those costs, generating around $1.6 million in accelerated tax savings.”
• “That amount alone allowed us to purchase another 3D printer, fueling continued growth. That’s what tax certainty allowed us to do. But right now, that certainty is slipping away. As these provisions begin to expire, our tax burden is increasing.”

Creators Wanted: The group also fit in a stop at Columbus State Community College, which serves approximately 41,000 students, to visit with students in the semiconductor and mechanical drive classes.
 
The last word: The NAM recently “stood shoulder-to-shoulder with congressional leaders—delivering a clear, urgent message on tax reform” and is “driving the agenda on regulatory certainty, on energy dominance, on permitting reform, health care and workforce development,” Wengel told the audience. “The NAM is not waiting for Washington to act; we are making sure Washington acts for you, for manufacturers.”

• Added NAM Executive Vice President Erin Streeter: “The NAM is on [these issues], and we’re going to keep fighting, as we do every day with the right leaders, the right strategies and the right vision for the future.”