Key Highlights
- The Manufacturing PMI reached 55.7 in June, indicating expansion, but may be inflated by early orders to avoid tariffs
- Tariffs are causing manufacturers to raise prices preemptively, affecting industries reliant on imported components like steel and electronics
- Re-shoring efforts are ongoing but slowed by permitting delays, interest rates, and a significant skilled labor shortage
- Despite challenges, manufacturing remains a vital part of the US economy, employing over 12.6 million Americans with competitive wages
Welcome to our annual Made in America feature, where we look at the state of manufacturing, and shine a spotlight on some domestic producers of the materials, tools and equipment contractors depend on for their work.
So how are manufacturers doing? One key leading indicator is S&P Global’s Manufacturing Purchasing Managers’ Index (PMI). For June, the PMI stood at 55.7, its highest level since 2022. The PMI considers new orders, production, employment, deliveries and inventories, and any score above 50 means manufacturing is expanding.
The Trouble with Tariffs
While a high PMI is good news, it is also probably inflated by buyers placing orders early to avoid future price increases connected to the next round of tariffs from the Trump Administration.
Trump's latest universal tariffs are set to expire on July 24, 2026, at which point the administration is expected to seek authorization from Congress to make them permanent, or rely on “active investigations” under Section 301 and Section 232 of the Trade Act to maintain long-term import duties.
But tariffs are not a one-time cost; they create an uncertainty that causes manufacturers to raise their prices preemptively. Manufacturers have largely stopped absorbing tariff costs and are building them into quotes, especially in steel-intensive, copper-intensive, and electronics-heavy products—and that includes a lot of plumbing and heating equipment.
Yes, tariffs have helped some American manufacturers—notably in fabricated steel, some cast iron and certain piping products—but most manufacturers are relying on imported sub-components.
The Re-shoring Slowdown
Re-shoring—companies moving production back to America from oversees—is still happening. Manufacturing construction spending remains massive (over $185B annualized) but has been drifting downward from the 2024 peaks. While companies were quick to buy up land and secure incentives, the next phase, the actual build-out, has been slow.
Why? Permitting delays, interest rate pressure and transformer shortages all play a role, but the skilled labor shortage has been a key factor.
In fact, the skilled labor shortage is as much a manufacturer’s problem as it is a contractor’s, particularly when it comes to welding, machining, pipefitting, foundry work, controls work, and industrial maintenance. Even manufacturers who are seeing high demand can neither find nor afford extra shifts. Maybe skilled trades training is an area where contractors and manufacturers can make common cause?
An American Success Story
No, manufacturing will never be the engine of the US economy the way it was back in the 1950s—we’re a service economy now—but domestic manufacturing means less energy spent on shipping goods, it keeps key elements of the supply chain firmly under our own control, and it offers lives and livelihoods to people who like working with their hands.
Manufacturing today employs some 12.6 million Americans according to the Bureau of Labor Statistics. And those jobs can pay well, with the average US manufacturing worker earning over $100,000 annually when factoring in comprehensive pay and benefits.
Let’s meet some great American companies making products for the plumbing, piping and hydronic heating industry, and learn a little about their histories and the good work they do.
About the Author
Steve Spaulding
Editor-in-Chief - CONTRACTOR
Steve Spaulding is Editor-in-Chief for CONTRACTOR Magazine. He has been with the magazine since 1996, and has contributed to Radiant Living, NATE Magazine, and other Endeavor Media properties. You can find him on LinkedIn at www.linkedin.com/in/stevespaulding.