Wipfli report of 456 U.S. facilities shows tariffs, raw material volatility and uneven sector performance continue to shape profitability and demand

MILWAUKEE, July 15, 2026 /PRNewswire/ -- Wipfli, a national advisory and accounting firm, today released its Manufacturing Benchmarking Survey, showing manufacturers are managing persistent cost pressures driven by tariffs and raw material volatility while maintaining a cautious outlook for 2026.

Based on responses from 456 manufacturing facilities across the United States, the report highlights an industry balancing rising input costs and policy uncertainty with steady demand expectations and improving operational maturity.

"Top concerns have largely remained unchanged, with raw material pricing and the overall cost of doing business continuing to lead the list," said Cara Walton, director of manufacturing market intelligence at Wipfli. "What we're seeing now is those cost pressures becoming more directly tied to tariff activity, which is creating ripple effects across profitability and pricing strategies."

Tariffs and cost pressures drive complexity

The report shows raw material price volatility (26%) and labor cost pressures (21%) as the leading drivers of increased business costs. Tariff-related uncertainty continues to influence sourcing decisions, with manufacturers reporting shifts toward domestic quoting activity and delays in work.

According to Walton, tariff-related cost changes are particularly challenging because of the lag in passing price increases through to customers.

"Manufacturers are often able to pass through raw material price increases, but it takes time," Walton said. "That delay creates margin pressure, especially for smaller suppliers working with larger customers where negotiations are more complex and prolonged."

Profitability pressure varies by sector

While many manufacturers are seeing stable or improving demand, financial performance remains uneven. Profitability remains constrained by rising input and operating costs that cannot always be fully passed through.

The report finds that metal formers are experiencing the greatest impact, with profitability lagging behind other segments.

"The segments most exposed to raw material volatility are also the ones seeing the greatest pressure on margins," Walton said. "Even when price increases are passed along, the timing gap erodes profitability in the interim."

Growth outlook remains positive, but uneven

Despite ongoing pressures, sentiment remains resilient. More than half of the surveyed manufacturers report a positive outlook for 2026, with approximately 60% expecting revenue growth of at least 5%.

However, performance continues to vary significantly by industry. Sectors such as aerospace, defense and infrastructure are outperforming expectations, while others — including heavy truck, agriculture and consumer-related segments — are experiencing weaker demand.

"Industry performance is highly variable right now," Walton said. "Manufacturers need to be more precise in how they forecast demand and understand their end markets. Relying on historical growth patterns alone isn't going to be enough in this environment."

Operational discipline and targeted investment are critical

The survey underscores the growing importance of operational consistency and cost control. Many manufacturers are increasing the frequency of input cost reviews, reflecting the need for more dynamic pricing strategies.

At the same time, capital investment remains steady at approximately 5% of revenue, with a focus on automation, productivity improvements and flexible capacity.

Manufacturers are also placing greater emphasis on strengthening data, forecasting and analytics capabilities to support decision-making.

"Companies that can align their internal data with market signals and customer demand will be better positioned to make accurate decisions," Walton said. "Technology can play a role, but it still depends on having reliable, well-structured data to begin with."

Strategic focus on capacity and execution

Capacity utilization remains at around 60%, with modest improvement expected. However, forecasts often exceed actual utilization levels, reinforcing the need for disciplined sales and operations planning.

Manufacturers that actively manage open capacity, align pricing strategies and maintain operational flexibility are better positioned to navigate ongoing uncertainty.

"Even with a positive outlook, the path forward is not going to be linear," Walton said. "Organizations that embrace complexity and stay disciplined in how they manage costs, pricing and operations will be best equipped to turn volatility into a competitive advantage."

Manufacturers can access the complete findings, industry benchmarks and segment-specific analysis in the full 2026 Manufacturing Benchmarking Survey.

About Wipfli

Wipfli is a leading national advisory and accounting firm with nearly 100 years of experience serving ambitious middle-market organizations. We understand our clients' unique challenges and help them succeed on their terms through assurance, tax, advisory, outsourcing and technology services. With 3,000+ associates and global alliances, we combine national capabilities with local relationships. Wipfli operates under an alternative practice structure: Wipfli LLP, a licensed CPA firm, provides attest services, while Wipfli Advisory LLC, a non-CPA firm, delivers business advisory and non-attest services. Learn more at wipfli.com or contact Alicia O'Connell at alicia.oconnell@wipfli.com.

Alicia O'Connell at alicia.oconnell@wipfli.com

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SOURCE Wipfli