News & Insights

2026 NAM State of Manufacturing Tour Stops in Dallas, Texas, for Manufacturing Institute’s State of the Manufacturing Workforce Address

DALLAS – The National Association of Manufacturers—the official partner of America250—continued its 2026 NAM State of Manufacturing Tour today in Dallas, Texas, under the theme “Building the Workforce of the Future.”

NAM President and CEO Jay Timmons, Manufacturing Institute President Carolyn Lee and Rockwell Automation Chairman and CEO and NAM Board Chair Blake Moret visited the Dallas College Garland Center and global leader in AI, digital business and technology services, NTT DATA, an official sponsor of the tour along with Schneider Electric. The stops today highlighted the challenges and opportunities shaping the future of manufacturing careers in America, while emphasizing the need for a highly skilled workforce to sustain innovation and economic growth.

In Texas, nearly 1 million manufacturing workers drive a sector that contributes hundreds of billions of dollars to the state’s economy, representing between 11% and 13% of economic output and making it one of the biggest manufacturing workforces in the nation.

Lee gave the MI’s annual State of the Manufacturing Workforce address at NTT DATA’s North American headquarters. “For years, manufacturers have said the same thing: if you want a strong economy, you need a strong manufacturing workforce,” she said. “If you want innovation that leads the world, you need people with the skills to put it to work. Workforce is not a side issue. It’s the strategy. We have the chance to harness creativity, unleash competitiveness and build a stronger future. But that future is not possible without our single greatest asset: the manufacturing workforce. We don’t just need people. We need talent. And that means our workforce needs the skills to succeed.”

Timmons convened a panel with Lee, NTT DATA Products Industries Global Leader and NAM board member Prasoon Saxena and Celanese Senior Vice President and Chief Information Officer Sameer Purao, focused on AI and the workforce. The event concluded with a site tour of NTT DATA’s innovation center, showcasing how technology is advancing the manufacturing industry in the AI era.

“The strength of manufacturing and the 13 million Americans who make things in this country depends on how seriously we invest in those workers and the millions who follow,” said Timmons who also serves as chair of the MI’s Board. “At this moment of inflection, transformative technology demands a new generation of skills. A rapidly evolving industry requires us to train, upskill and retain our people with greater urgency. Leaders in Washington have a responsibility to advance policies that strengthen our workforce. The MI champions those policies every day.”

“We are proud to host the NAM and Manufacturing Institute today,” said Saxena. “We know that manufacturing’s future will be defined by how effectively we integrate advanced technologies like AI with a highly skilled workforce. Industry 5.0 is our north star where data and AI with human expertise converge to create resilient, sustainable operations.”

The group also toured one of the MI’s FAME chapters in Texas, whose mission is to drive workforce development initiatives across the state. “Texas has led the way with FAME expansion in recent years—which is something we had the opportunity to see firsthand this morning,” said Lee. “Dallas College has been an outstanding educational partner, serving two chapters in Texas, the FAME Dallas Chapter and Metro360 Chapter. It is a model for how durable solutions for manufacturers can thrive with community cooperation.”

“We were honored to welcome the NAM and MI to Dallas College and to showcase the strength of our Texas FAME program,” said Dr. Veronique Tran of Dallas College. “Through FAME, we are creating a direct, employer-led pathway into high-skill, high-wage manufacturing careers—combining classroom instruction with paid, hands-on experience that prepares students to contribute from day one. We are grateful for the collaboration with the MI and appreciate their leadership in scaling solutions that strengthen our workforce.”

From Dallas, the 2026 NAM State of Manufacturing Tour will go on to Houston, Texas, and conclude on Friday, Feb. 27, in Phoenix, Arizona. The tour made stops in New York, Ohio, Pennsylvania, North Carolina and Wisconsin prior to today’s events in Dallas. Throughout the tour, the NAM will continue meeting with policymakers, manufacturers of all sizes, students and business leaders, advocating for the people and policies that will ensure the United States is the best place in the world to do business. To learn more about the tour and the NAM’s mission, visit https://nam.org/stateofmfg/, and to learn more about the State of the Manufacturing Workforce address, visit https://themanufacturinginstitute.org/state-of-mfg-workforce.

-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 $2.95 trillion to the U.S. economy annually and accounts for 53% 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.

–The MI-

The Manufacturing Institute works to build and strengthen the manufacturing workforce for individual opportunity, community prosperity and a competitive manufacturing industry for the future. This is done through implementing groundbreaking initiatives, convening industry leaders, conducting innovative research and promoting public policy that supports the sector as it meets the opportunity of modern manufacturing. As the 501(c)3 nonprofit workforce development and education affiliate of the National Association of Manufacturers, the MI is a trusted adviser to manufacturers, equipping them with solutions to address the toughest workforce issues. For more information on the MI, please visit www.themanufacturinginstitute.org.

-NTT DATA-

NTT DATA is a $30+ billion business and technology services leader, serving 75% of the Fortune Global 100. We are committed to accelerating client success and positively impacting society through responsible innovation. We are one of the world’s leading AI and digital infrastructure providers, with unmatched capabilities in enterprise-scale AI, cloud, security, connectivity, data centers and application services. Our consulting and industry solutions help organizations and society move confidently and sustainably into the digital future. As a Global Top Employer, we have experts in more than 70 countries. We also offer clients access to a robust ecosystem of innovation centers as well as established and start-up partners. NTT DATA is part of NTT Group, which invests over $3 billion each year in R&D.

RACINE, Wis. – As the 2026 NAM State of Manufacturing Tour continued its cross-country run, the NAM today released “Manufacturers Feed America,” a new report detailing how the United States food and beverage supply chain is a global leader in delivering safe, affordable, accessible and nutritious food and beverage options.

Anchored in world-class science and rigorous safety standards, the American food system strengthens American communities, fuels innovation and drives economic growth nationwide. The report includes policy recommendations to help policymakers avoid undermining the system that ensures American families can count on safe, abundant and affordable food every day. Understanding the history of the U.S. food and beverage regulatory system through the lens of American manufacturing helps explain why it has succeeded and how that success can be put at risk by replacing evidence-based safeguards with ideological approaches

From the headquarters of industrial and agricultural equipment manufacturer CNH, NAM President and CEO Jay Timmons said:

“Food manufacturers are focused on affordability and are committed to keeping America’s food supply safe, reliable and nutritious. By investing in innovation and strengthening safety standards, they help ensure that nutritious food remains accessible to families in every community. A thriving food and beverage sector strengthens communities, supports jobs and drives economic growth. Maintaining U.S. leadership in this sector is essential to long-term economic growth, supply chain resilience and global competitiveness.

“Manufacturing powers the engine that feeds America — from farm to processing to packaging to distribution. America’s manufacturers are leading the world in these life-enhancing innovations, making America the best place to invest, create jobs and grow communities. But fragmented or ideology-driven proposals could increase costs for families, reduce access to food and slow innovation—without improving public health.”

The nation’s largest manufacturing sector—the food and beverage industry—connects farms to factory floors to family tables every day, supporting 47 million jobs, generating $2.8 trillion in wages and contributing $9.5 trillion in economic output. This economic engine touches every community in the country and is especially vital in rural and regional areas where food-and-agriculture-related jobs anchor local communities.

The report comes as recent legislative and regulatory proposals create new restrictions on food ingredients and packaging, creating an unworkable patchwork of regulations that threatens to drive up costs, weaken delicate supply chains and undermine the science-based standards that enable farmers and manufacturers to deliver safe, abundant and affordable food to Americans nationwide.

Manufacturers across the food and beverage supply chain will continue to partner with policymakers on policies that respect science and operational realities, so that the U.S. can deliver an even stronger food system that supports public health, economic growth and global competitiveness—bolstering America as the best place in the world to make things and empowering manufacturers’ efforts to nourish the American people for generations to come.

The NAM also launched a digital hub, complete with video testimonials from representatives of America’s food and beverage manufacturers at every step of the supply chain as well as policy papers with educational information about food and beverage policies and the challenges posed by inconsistent regulatory regimes and standards based on ideology rather than science. For more information, visit nam.org/issues/manufacturers-feed-america/

-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 $2.95 trillion to the U.S. economy annually and accounts for 53% 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

Washington, D.C. – Ahead of the 2026 State of the Union address, National Association of Manufacturers President and CEO Jay Timmons released the following statement during the NAM State of Manufacturing Tour:

“The state of manufacturing is boundless if policymakers will help clear the skies. For America to lead, now and in the long run, manufacturers need a policy framework that makes the United States the best place in the world to make things—one that lowers the cost of doing business.

“Thanks to President Trump, leaders in his Cabinet and in Congress, the 2017 provisions of the Tax Cuts and Jobs Act were not just made permanent—they were made even stronger. And in doing so, we saved 6 million jobs. The tax and investment incentives in H.R. 1 amount to the most significant economic transformation in the history of our industry and is rocket fuel for manufacturers.

“Yet no rocket can launch until the skies are clear, the outlook is stable and the conditions are certain. Manufacturers need certainty because uncertainty chokes investment—and volatility chokes growth. To deliver the stability that manufacturers need to launch, the White House and Congress need to secure the rest of the NAM’s comprehensive manufacturing strategy.

“That means embracing an all-of-the-above energy strategy, delivering real permitting reform, driving the funding we need for modern infrastructure, modernizing regulations, investing in our workforce, fixing our immigration system, and instituting strategic trade policies.

“Every part and every policy must work together.

“If our nation’s leaders empower us through investments in smart and sustainable public policy, America’s manufacturers will reach new heights. What better way to honor our nation’s 250th anniversary than to empower us—the 13 million people who make things in America—to deliver the greatest manufacturing era in American history.”

Background: NAM State of Manufacturing Tour

Spanning seven states—New York, Ohio, Pennsylvania, North Carolina, Wisconsin, Texas and Arizona—the tour brings together manufacturing leaders, workers, educators, students and elected officials to highlight the policies and conditions needed for the United States to compete and win in a global economy, focusing on innovation, tax policy, permitting reform, energy dominance, workforce and trade policy.

-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 $2.95 trillion to the U.S. economy annually and accounts for 53% 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

2026 NAM State of Manufacturing Tour Stops in Milwaukee, Wisconsin

MILWAUKEE – The National Association of Manufacturers—official partner of America250—in partnership with Wisconsin Manufacturers & Commerce, continued its 2026 NAM State of Manufacturing Tour today in Milwaukee, Wisconsin, under the theme “Creating the Future.” Today’s visits included Rockwell Automation, Komatsu Mining Group and CNH.

The Milwaukee stops showcased how advanced manufacturing technologies power America’s industrial legacy and future—boosting productivity, strengthening supply chains and creating high-quality manufacturing careers. In Wisconsin, manufacturing supports 462,000 workers—more than 15% of the state’s workforce—cementing its role as an economic engine for the state.

“When it comes to artificial intelligence, manufacturers have not just deployed advanced technologies; we’ve developed them,” said NAM President and CEO Jay Timmons. “What we saw today at Komatsu, Rockwell Automation and CNH is proof that AI is already transforming modern manufacturing. These tools make our manufacturing workers safer, our supply chains smarter and our products more advanced. The growth of manufacturing drives AI, and the growth of AI drives manufacturing. If America wants to lead on AI, America must support the manufacturers leading the way. That includes regulations that foster innovation—not stifle it.”

The day started with a tour of Komatsu’s state-of-the-art South Harbor Campus—a world-class example of how sustainable design and high-tech manufacturing can coexist. The group then visited Rockwell Automation, the world’s largest company dedicated to industrial automation and digital transformation, where Chairman and CEO and NAM Board Chair Blake Moret has led for the past decade. After the tour, Timmons, Moret and Manufacturing Institute President and Executive Director Carolyn Lee convened a roundtable discussion on “Responsible AI Leadership,” focused on how manufacturers are approaching AI and advanced technologies.

“At Rockwell Automation, we believe that the ‘Factory of the Future’ is built on the intersection of human ingenuity and intelligent machines,” said Moret. “What we saw today in Milwaukee—from Komatsu to the discussions here at Rockwell—is an industry moving at the speed necessary to compete and win. This tour is about making sure Washington understands that speed. Manufacturers need abundant, reliable energy, comprehensive permitting reform and investments in the manufacturing workforce to ensure the massive investments required for AI and automation can continue to flow into our communities and beyond.”

The day concluded at industrial and agricultural equipment manufacturer CNH, where demonstrations showed how precision technology is benefiting both the traditional manufacturing sector and the agricultural manufacturing sector.

“Wisconsin isn’t just a manufacturing state—it’s a manufacturing powerhouse,” said Wisconsin Manufacturers & Commerce President and CEO Kurt Bauer. “From advanced machinery and paper production to food processing and cutting-edge technologies, our manufacturers compete and win globally. We are proud to partner with the NAM to showcase Wisconsin’s strength during this stop on the NAM State of Manufacturing Tour to show the strength of Wisconsin’s manufacturing workers. At the same time, we must confront a serious workforce challenge—60% of Wisconsin employers say they cannot find enough workers, and labor force participation has been declining for decades. To sustain our leadership, we need policies from Washington that strengthen and supplement our world-class training efforts, expand workforce pathways, align education with employer needs and make it easier for individuals to enter and advance in manufacturing careers.”

From Milwaukee, the 2026 NAM State of Manufacturing Tour will go on to Dallas, Texas, where Lee will deliver the 2026 Manufacturing Institute’s State of the Manufacturing Workforce Address; Houston, Texas; and conclude Friday in Phoenix, Arizona. The tour made stops in New York, Ohio, Pennsylvania and North Carolina prior to today’s events in Milwaukee. Throughout the tour, the NAM will continue meeting with policymakers, manufacturers of all sizes, students and business leaders, advocating for the people and policies that will ensure the United States is the best place in the world to do business. To learn more about the tour and the NAM’s mission, visit https://nam.org/stateofmfg/.

-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 $2.95 trillion to the U.S. economy annually and accounts for 53% 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.

2026 NAM State of Manufacturing Tour Stops in Charlotte and Concord, North Carolina

 CHARLOTTE – The National Association of Manufacturers—official partner of America250—in partnership with the North Carolina Chamber, continued its 2026 NAM State of Manufacturing Tour today in Charlotte and Concord, North Carolina, under the theme “Competing for the Future.”

The tour stop highlighted how the NAM-backed H.R. 1 is creating a more competitive tax environment—and why sustaining that certainty, along with regulatory rebalancing, modern infrastructure and reliable energy, is critical to driving continued investment and job creation across the sector. Today’s visits included Ketchie Inc., Siemens Energy and Electrolux.

“Here in North Carolina, we’re seeing exactly what tax certainty makes possible,” said NAM President and CEO Jay Timmons. “Thanks to President Trump and leaders in Congress, the pro-growth provisions in H.R. 1 were made permanent and strengthened, delivering a win for manufacturers of all sizes. To make the United States the best place in the world to do business and so manufacturers across North Carolina can keep investing, hiring and competing, we must build on that tax foundation we secured. That means enacting comprehensive, commonsense permitting reform to unleash American energy dominance, driving the funding we need for strong, modern infrastructure, modernizing regulations, investing in our manufacturing workforce and implementing smart AI policy—all through a comprehensive manufacturing strategy.”

Ketchie President and Owner Courtney Silver hosted the first stop of the day with a tour and panel discussion on how tax certainty due to the NAM-backed H.R. 1 has empowered manufacturers like her to reinvest in their workforce and facilities. Silver emphasized that pro-growth tax policies, such as permanent full expensing, have enabled business owners to remain agile and competitive. With that tax certainty in place, Ketchie has invested in new critical machinery—expanding capacity, increasing efficiency and positioning the company to hire, grow and compete for the long term.

The tour then moved to Siemens Energy, which recently announced a $421 million expansion in North Carolina to grow its large power transformer manufacturing and continue gas turbine production in Charlotte—an investment expected to create 500 new jobs statewide.

The day concluded at the North American headquarters of Electrolux, the global home appliance manufacturer, employing hundreds in the Charlotte region.

Throughout the day, business leaders highlighted the impact of North Carolina’s nearly 500,000 manufacturing workers who make up more than 11% of the workforce and power the largest manufacturing sector in the Southeast.

Timmons was joined by North Carolina Chamber President and CEO Gary Salamido and other NAM leaders throughout the day. Deputy Secretary of the Treasury Derek Theurer and Rep. Tim Moore (R-NC) participated in the visit to Ketchie.

“Thanks to America First policies, domestic manufacturing is back, and we’re seeing serious investments right here in North Carolina,” said Rep. Moore. “It was great to join the National Association of Manufacturers at Ketchie alongside Deputy Secretary of the Treasury Derek Theurer to see firsthand how tax certainty and pro-growth policies are giving companies the confidence to expand and compete with anyone in the world.”

“North Carolina’s manufacturers are a major driver of our state’s economy, contributing a higher-than-average 15% of our gross state product,” said Salamido. “With a manufacturing tradition like ours, we are proud to partner with the NAM to show the nation that our state is the premier destination for manufacturing, so long as pro-business policies allow for it.”

From Charlotte, the 2026 NAM State of Manufacturing Tour will go on to Milwaukee, Wisconsin; Dallas and Houston, Texas; and Phoenix, Arizona. The tour made stops in New York City, Cleveland and Pennsylvania prior to today’s events in Charlotte. Throughout the tour, the NAM will continue meeting with policymakers, manufacturers of all sizes, students and business leaders, advocating for the people and policies that will ensure the United States is the best place in the world to do business. To learn more about the tour and the NAM’s mission, visit https://nam.org/stateofmfg/.

-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 $2.95 trillion to the U.S. economy annually and accounts for 53% 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.

Building permits increased 4.3% in December but fell 2.2% over the year. Permits for single-family homes in December decreased 1.7% and 10.9% over the year. On the other hand, permits for buildings with five or more units surged 18.1% from November and 18.7% over the year.

In December, housing starts rose 6.2% from November but declined 7.3% over the year. Starts for single-family homes moved up 4.1% from November but dropped 9.0% over the year. Meanwhile, starts for buildings with five or more units jumped 10.1% over the month but fell 1.0% over the year.

Housing completions increased 2.3% over the month but ticked down 0.1% over the year. Single-family home completions edged down 0.1% from November but surged 10.2% from December 2024. At the same time, completions for buildings with five or more units rose 7.1% over the month but plummeted 15.9% from one year ago.

Manufacturing activity in New York state increased but at a slightly slower pace in February, with the headline business conditions index edging down 0.6 points to 7.1. The new orders index similarly ticked down but remained positive, decreasing 0.8 points to 5.8, while the shipments index plummeted 17.3 points to -1.0. Unfilled orders turned positive, surging 17.3 points to 9.1, while inventories rose 9.2 points to 7.1, indicating business inventories are growing again. Delivery times lengthened, and supply availability improved but remained negative, increasing 3.1 points to -1.0.

Employment increased in February, with the index for the number of employees rising 13.0 points to 4.0. At the same time, the average employee workweek index grew to 2.1 from -5.4, signaling an increase in hours worked from January. The prices paid index moved up 6.3 points to 49.1, while the prices received index rose 7.8 points to 22.2, reflecting a faster pace of increase in both prices received and prices paid.

In February, firms’ optimism regarding the future remained high, with the future business activity index advancing 4.4 points to 34.7. In the next six months, new orders are expected to rise and at a slightly faster pace compared to the prior month at 34.9. The future employment index jumped 11.2 points to 26.1, 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, increasing from 52.6 to 57.6 and from 36.5 to 40.3, respectively. Furthermore, capital spending plans strengthened from January, up from 10.3 to 18.2.

In February, Philadelphia’s regional manufacturing activity expanded for the second consecutive month to its highest level since September, with the index for general business activity advancing from 12.6 to 16.3. This month, 31.0% of firms reported increases in activity, while 14.7% of firms noted decreases. The indexes for new orders and shipments fell, moving from 14.4 to 11.7 and from 9.5 to 0.3, respectively. Meanwhile, the employment index turned negative for the first time since June, falling 11.0 points, as the average employee workweek plunged 20.7 points to -11.6.

The prices paid index declined from 46.9 to 38.9, its lowest reading since January 2025, while the prices received index fell from 27.8 to 16.7, its lowest reading since December 2024. As has been the case for many months, the prices received index remained lower than the prices paid index, indicating that manufacturers have been absorbing a portion of higher costs paid.

Looking ahead, indicators showing expectations for future growth grew after two months of declines. After falling 12.6 points in January, expectations for future business activity soared 17.3 points to 42.8 in February. The rise came from an increase in the proportion of firms expecting an increase in activity (52.0%). At the same time, the number of firms anticipating a decrease in activity (9.2%) was virtually unchanged in February. The future new orders index rose from 32.9 to 54.1, its highest reading since November 2024, and the future shipments index moved up from 40.8 to 47.4. On the other hand, the capital expenditures index fell from 30.3 to 14.4, its lowest reading since September. The future prices paid and prices received indexes declined from 66.6 to 54.1 and from 61.8 to 50.1, respectively. Additionally, the index for future employment stepped down from 28.8 to 14.9.

In February, firms were asked about changes in core customer price sensitivity and anticipated cost changes. Of those responses, 30.8% of firms view core customers as more price sensitive since last quarter. Meanwhile, 39.1% of firms expect price changes in their industry’s costs, while 60.9% do not. When asked how they anticipate competitors to respond, 77.8% expect them to raise prices in the near term, while none believe they will lower prices. When asked, 58.3% of firms said they have experienced a net negative impact from tariffs over the past year, but 16.7% have seen a net positive impact. Looking forward, 46.2% expect a net negative impact over the next year from tariffs, while 15.4% predict a net positive impact.

The S&P Global Flash U.S. Manufacturing PMI fell from 52.4 to 51.2 in February, a seven-month low, although it remained positive. This continued the trend of seven consecutive months of growth, but marked the weakest advancement seen during that period. Factory production and new order growth both decreased in February, with production exhibiting its weakest growth since July. Meanwhile, export orders declined for the sixth consecutive month, which was due partially to adverse weather.

Inventories decreased in February as the stock of finished goods fell for the first time since July and at the sharpest rate in 13 months. At the same time, supplier delivery times lengthened to the greatest extent since October 2022, with respondents linking the increase to supplier delays, shortages and poor weather. Manufacturers’ input cost inflation ticked higher and continued to remain high by historical norms. Meanwhile, selling price inflation moderated to a 14-month low, resulting from increasing discounts to boost sales. Overall, price increases slowed for manufacturers but accelerated for the service industry.

Overall business activity declined to a 10-month low, edging down from 53.0 in January to 52.3 in February. In addition to manufacturing growth slowing, the growth rate in the services sector also moderated, falling to a 10-month low. Overall, new orders growth cooled as companies cited high prices hurting sales. Employment rose only slightly due to sluggish sales and concerns over rising costs.

On the other hand, optimism about future business conditions jumped in February to a 13-month high. The optimism reflected expectations for improving economic conditions and a boost after frigid weather lets up. In addition, companies expressed hope for greater policy support, including lower interest rates and government fiscal stimulus.

Industrial production increased 0.7% in January, while manufacturing output rose 0.6% after staying the same in December. At 97.5% of its 2017 average, manufacturing production advanced 2.4% from January 2025. Capacity utilization for manufacturing was 75.6%, up 0.4 percentage points from December and 1.1% over the past year. Capacity utilization remained 2.6 percentage points below its long-term average from 1972 to 2025.

In January, all major market groups posted gains. Consumer goods production grew 0.7%, while business equipment output increased 0.9%. The gain in production of consumer durables (up 0.5%) was led by home electronics’ output rising 2.8%. Meanwhile, the index for consumer nondurables stepped up 0.7%, experiencing gains in all but two of its categories. Among business equipment, the 1.2% gain in the index for industrial or other equipment led the increase. At the same time, the index for materials improved 0.6%, while the index for construction supplies moved up 0.5%, and the index for business supplies rose 1.1% in January.

Durable goods manufacturing advanced 0.8% in January and 3.7% from the year prior. Monthly growth was greatest for nonmetallic mineral products (up 2.2%), while aerospace and miscellaneous transportation equipment posted the only decline (down 0.2%), although it was still up 9.8% from January 2025. Meanwhile, led by a 1.3% gain in plastics and rubber products output, nondurable manufacturing increased 0.4% in January and 1.3% from January 2025.