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VideoNAM Survey Highlights Rising Cost Pressures and AI in Manufacturing | Podcast
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On the Shop Floor
Manufacturers remain optimistic about growth, but rising material costs and trade uncertainty are making investment decisions more difficult. In this episode of Weaver: Beyond the Numbers, On the Shop Floor, Kurtis Dixon and Marvin Ferguson are joined by Chris Boyd to discuss what the National Association of Manufacturers’ (NAM) Q2 2026 outlook survey reveals about margins, hiring and capital investment.
Key Points:
- Manufacturer optimism remains relatively steady at 74%, but sales growth, production growth and hiring expectations declined slightly from the previous quarter.
- More than 80% of manufacturers cite raw material costs as a top concern, as rising input costs continue to outpace expected sales growth and pressure margins.
- AI and data center investment are creating opportunities for some manufacturers, while others are evaluating AI to improve forecasting, supply chain planning and operational efficiency.
The survey shows an industry that remains confident but is becoming more selective about hiring and investment decisions. About three quarters of manufacturers remain optimistic, consistent with long-term averages, while expected sales growth fell from 3.8% to 3.3%, and production growth dropped from 3.5% to 3%. At the same time, raw material costs emerged as a leading concern. The hosts noted that manufacturers are facing a difficult spread between revenue growth and rising input costs, creating new pressure on profitability and investment decisions.
External forces are adding to that challenge. The discussion highlights how energy costs, trade uncertainty and geopolitical events can quickly affect transportation expenses, supply chains and production costs. With 72% of manufacturers still identifying trade uncertainty as a major concern, many organizations are taking a more cautious approach to hiring and long-term planning. As Chris explains, manufacturing is “more of a long-term game,” making it harder to commit capital when future costs remain uncertain.
The conversation also examines the growing influence of AI across the manufacturing sector. While some manufacturers are benefiting from demand tied to data centers, power infrastructure and industrial equipment, others are evaluating AI tools to improve forecasting, reduce manual processes and strengthen supply chain planning. Chris cautions against ignoring the technology and poses a key question: “How are you using AI to help streamline your forecasting [and] supply chain planning? Are there opportunities to reduce manual work?” The hosts connect these technology investments to a broader trend of targeted capital spending focused on improving operations rather than simply expanding capacity.
The survey’s broader message is that demand remains healthy, but manufacturers have less room for error as costs rise faster than growth. Companies that can respond quickly to changing conditions, evaluate investments carefully and adapt their operations may be better positioned to maintain profitability as market pressures continue to evolve.
Subscribe and listen to future episodes of Weaver: Beyond the Numbers, On the Shop Floor, on Apple Podcasts or Spotify.
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