Underneath the headline figures, manufacturers are navigating worsening supply-side bottlenecks and persistent inflation. The Prices Index remained elevated at 71.1%, extending raw material price increases to a 23-month streak driven by soaring costs for energy, labor, and tariff-impacted metals like steel and aluminum. Concurrently, the Supplier Deliveries Index rose to 59.3%, pointing to rapidly stretching lead times. A scarce supply of semiconductors, memory, and electrical components—heavily drained by booming AI infrastructure buildouts—has combined with Middle East shipping disruptions in the Strait of Hormuz to trigger supply chain stress described by some executives as more complex than the post-COVID-19 environment.
Industry Performance:
- 15 of 17 industries expanded, led by Primary Metals, Electrical Equipment, and Miscellaneous Manufacturing.
- 5 of the top 6 GDP contributors grew (Transportation Equipment, Petroleum & Coal, Computer & Electronic Products, Machinery, and Food & Beverage).
- 2 industries contracted: Wood Products and Chemical Products (the largest manufacturing sector by GDP share).