U.S. manufacturers said they were more optimistic in the third quarter than the previous period, even though they cited persistent uncertainty in the areas of trade, rising raw material costs, and increasing health care costs, according to a survey from the National Association of Manufacturers (NAM).
Respondents reported higher optimism in the third quarter (65%) than the second quarter (55.4%), NAM’s “Q3 2025 Outlook Survey” showed. But at the same time, they admitted rising stress about three familiar policy areas in Q3 compared to Q2:
- Trade uncertainty: 78.2% (up from 77.0%)
- Rising raw material costs: 68.1% (up from 66.1%)
- Increasing health care costs: 65.1% (up from 60.0%)
“The third quarter optimism level aligns with August’s production data released by the Federal Reserve, which showed that manufacturing output was 100.3% of its 2017 average, barely above March’s level of 100.2%, taking four months to recover from April’s drop,” NAM Chief Economist Victoria Bloom said in a release.
“At the same time, manufacturers are projecting moderate growth over the next 12 months with production expected to rise 2.5% (up from 1.4% in Q2) and capital investments 1.0% (up from 0.3%). Costs are still expected to climb, but at a slightly slower pace than Q2, with raw material and input costs projected to increase 5.4% (down from 5.8%) and product prices up 3.7% (down from 4.3%). These findings reflect both the resilience of the sector and the real challenges still weighing on growth,” Bloom said.
That uncertainty is acting as a drag on the buoyancy that the sector would otherwise feel about the tax breaks they received in the Trump Administration’s Big Beautiful Bill, NAM leaders said.
“To supercharge the increase in optimism we’re starting to see, manufacturers need certainty across a full manufacturing strategy spanning sensible trade policy, permitting reform to unleash American energy dominance, modernized regulations and workforce investments,” NAM President and CEO Jay Timmons said. “Put another way, so long as this uncertainty persists, manufacturers will not be able to tap fully into the strength of President Trump’s monumental and historic tax provisions, championed by our allies in the White House and Congress.”
