American manufacturing delivered a mixed set of signals this week. Federal data showed that manufacturing output declined 0.3% in August after seven consecutive monthly increases, while manufacturing employment increased by 16,000 jobs. At the same time, companies continued to announce significant investments in domestic production, and demand for manufacturing technology remained substantially above year-ago levels.
Taken together, the week’s developments point to a manufacturing sector that is still working through uneven conditions while continuing to expand its underlying capacity. New investments are reaching transformers, pharmaceuticals, aluminum, die casting, semiconductors and critical minerals. Defense commitments are supporting domestic production of strategic materials, manufacturers are investing in skilled workers, and programs supporting small and midsized manufacturers are expanding access to advanced technology. The more important story is therefore not any single factory announcement, but the continued development of the broader industrial network.
Manufacturing Output Softens as Capital Investment Continues
U.S. manufacturing output fell 0.3% in August, with durable-goods production declining 0.5%. Manufacturing capacity utilization stood at 76.3%, 3.1 percentage points below its long-run average. The employment picture was somewhat stronger, with manufacturing adding 16,000 jobs during the month.
Other indicators suggest that manufacturers continue to invest even as near-term production remains uneven. Metalworking machinery orders totaled $605.8 million in July, down 8% from June but up 55.2% from a year earlier. Manufacturing technology orders reached $4.03 billion through July, an increase of 37.1% year over year. Orders for forging and stamping equipment reached their highest level since December 2012. Contract machine-shop orders declined 1.3% in dollar value during July, although unit orders increased 2%.
These numbers illustrate an important distinction between current production and investment in future capacity. A factory can experience a slower month while its owners are still purchasing equipment, expanding facilities and preparing for additional demand. For smaller manufacturers, that distinction matters because capital investments made today can determine whether a company is able to participate in new domestic supply chains several years from now.
The broader reshoring effort will not move in a straight line. Production volumes will continue to respond to interest rates, demand, inventories and individual industry cycles. What matters over a longer period is whether manufacturers are continuing to add capabilities and whether those capabilities can be connected across the domestic supply base.
New Investment Is Extending Beyond the Factory Floor
Several major investments announced this week demonstrate how domestic manufacturing capacity is expanding across the industrial ecosystem.
Hitachi Energy announced plans to invest $528 million in a new transformer manufacturing facility in Gallman, Mississippi. The project is expected to create more than 700 jobs, with production scheduled to begin in 2029. The investment is part of approximately $1.5 billion that Hitachi has committed to U.S. manufacturing.
Reckitt announced plans to invest up to $600 million across facilities in New Jersey and North Carolina to expand manufacturing and research and development while strengthening its U.S. supply chain. Hovione also completed a $100 million U.S. investment cycle with the opening of a 31,000-square-foot facility in New Jersey that will double its commercial spray-drying capacity.
Elsewhere, ArtiCast announced a $10.3 million die-casting facility in Jackson, Michigan, expected to create 100 jobs and serve aerospace, defense, automotive and humanoid robotics customers. Kibar Americas began production at a new aluminum facility in Fairmont, West Virginia, supplying HVAC, packaging, automotive and industrial customers.
The significance of these projects extends beyond the number of jobs or the size of individual facilities. Manufacturing depends on layers of specialized suppliers that provide materials, components, tooling, processing and technical expertise. Increasing domestic capacity at one level creates opportunities at other levels of the supply chain.
That is particularly important for America’s large population of small and midsized manufacturers. The strength of the U.S. manufacturing model is not simply the presence of large factories; it is the ability of thousands of specialized businesses to work together to produce increasingly complex products.
Critical Materials Are Becoming Part of the Manufacturing Strategy
The week’s defense-related announcements also highlighted the connection between manufacturing capacity and access to critical materials.
Elmet Group received a roughly $2 billion Defense Logistics Agency contract related to tungsten stockpiling. The Department of War also committed $450 million in redeemable preferred equity to support the expansion of domestic tungsten production. Tungsten is used in a range of defense applications, including the F-35, Patriot and THAAD systems and submarines.
A separate agreement involving Almonty and Rwanda also focused on expanding tungsten supply under a U.S.-backed economic framework.
The immediate objective is securing access to a material that has important defense applications. The broader issue is whether the United States has enough domestic and allied capacity across the full chain of production to respond when demand changes or international supply becomes constrained.
This is one reason manufacturing resilience cannot be measured simply by counting factories. Raw materials, processing capabilities, machine tools, skilled workers and specialized suppliers all contribute to the country’s ability to produce what it needs. Building redundancy and optionality across those layers can make the overall system more resilient.
Manufacturing Networks Are Becoming More Capable
Support for smaller manufacturers was another recurring theme this week.
The National Institute of Standards and Technology awarded more than $30 million to Manufacturing Extension Partnership centers in 11 states and Puerto Rico. The funding is intended to help small and midsized manufacturers adopt advanced manufacturing technologies and improve their capabilities.
At the same time, IMTS 2026 opened in Chicago with 1,788 exhibitors, including 400 first-time exhibitors. The event occupies 1.17 million square feet, with more than 90,000 attendees expected from all 50 states and 113 countries.
The scale of IMTS provides a useful reminder that manufacturing technology is not limited to the largest industrial companies. Machine shops, fabricators, contract manufacturers and other specialized businesses are continually adopting equipment and software that allow them to produce more complex parts and compete for new work.
Technology can serve as a force multiplier for this network, particularly when it helps manufacturers find the right partners and make better decisions. But the technology itself is only part of the equation. Manufacturing remains a deeply relational industry in which companies need to trust one another, understand each other’s capabilities and solve problems together.
That combination of technology and relationships is central to the American manufacturing model. Rather than relying exclusively on vertically integrated production, the United States can draw on a distributed network of specialized businesses if those businesses can effectively discover and work with one another.
Workforce Investment Is Increasingly Tied to Business Growth
Workforce development also received significant attention this week, with companies increasingly connecting training directly to their manufacturing operations.
General Motors said it invested nearly $200 million over the previous year in skilled trades, advanced manufacturing, engineering and technician positions. The company also placed approximately 90 new skilled-trades apprentices in April.
The automotive sector provides another indication of continued investment. Industrial Info Resources identified 34 U.S. automotive projects totaling $9.7 billion that are scheduled to begin construction during the fourth quarter of 2026. Approximately 75% of those projects are plant expansions, compared with $6.2 billion in comparable projects during the same period a year earlier.
For manufacturers, workforce development ultimately depends on whether businesses have enough demand and confidence to hire, train and retain people. Apprenticeships and technical training are most effective when they are connected to real jobs and growing companies.
That creates an important connection between the investment stories in this week’s newsletter and the workforce discussion. New factories require workers, but so do the suppliers that support those factories. A stronger manufacturing ecosystem creates more opportunities for people to build careers around technical skills, engineering and skilled trades.
Around the Horn
Semiconductor research: The Department of Commerce finalized a CHIPS R&D award of up to $1 billion to Anderon, a newly formed IBM subsidiary, for semiconductor research and development and a new quantum semiconductor foundry.
Grid reliability: The Department of Energy issued an emergency order affecting the PJM electricity market for September 17–18 in response to anticipated system stress. DOE said more than 35 gigawatts of unused backup generation capacity exists nationwide.
Trade barriers: The U.S. Trade Representative requested public comments for the 2027 National Trade Estimate Report, with comments due October 29. The process will examine foreign trade barriers, including issues affecting U.S. manufacturers and domestic supply chains.
Forced labor: USTR convened more than 50 trading partners for training related to enforcing prohibitions on imports connected to forced labor. The agency said 12 additional economies had adopted related measures by July 2026.
U.S.-China trade: U.S. Trade Representative Ambassador Jamieson Greer is scheduled to travel to New York to meet Chinese Vice Premier He Lifeng ahead of a planned U.S.-China summit. Trade, market access and other economic issues are expected to be part of the discussions.
The Industrial Base Is Larger Than Any Individual Factory
The most important development this week may be the cumulative effect of many different investments rather than any single announcement.
Manufacturing output declined in August, but companies continued investing in equipment, facilities, critical materials and workers. Government programs expanded support for smaller manufacturers, while major industry events demonstrated the breadth of the manufacturing technology ecosystem. At the same time, defense requirements are creating additional demand for domestic capabilities in areas that extend well beyond finished weapons systems.
This is what a rebuilding industrial base looks like in practice. It is not simply a collection of large factories. It is a network of material suppliers, machine shops, contract manufacturers, engineers, skilled tradespeople, logistics providers and technology companies that have to work together.
The United States has a significant advantage in that distributed network of entrepreneurial businesses. The challenge is making it easier for those businesses to discover one another, build trusted relationships and participate in the growing demand for domestic production.
The current reshoring cycle is still in its early stages of what could be a twenty- to thirty-year shift in how manufacturing supply chains are organized. The opportunity is not to recreate a vertically integrated industrial model, but to make the American network more capable, connected and resilient. Technology can be an important force multiplier in that effort, but the foundation remains the businesses and people that actually make things.
