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The NFIB Small Business Optimism Index stepped down 3 points to 95.8 in March, falling below the 52-year average of 98.0. March’s decrease was due primarily to a decline in earnings trends and expected business conditions. Of the 10 components included in the index, eight decreased and two stayed the same. Meanwhile, the Uncertainty Index rose 4 points to 92, still well above the 51-year average (68) and above the average since 2016 (80).

Taxes were again cited as the top concern for small business owners, with 19% reporting them as the most important problem, unchanged from February. The share of business owners reporting labor quality as the top problem stayed the same in March at 15%, with 32% struggling to fill open jobs and 52% reported hiring or trying to hire in March. Meanwhile, inflation ranked third in the list of concerns, with 14% reporting it as their top problem, up 2 points from February, with a net 25% raising prices.

A net 33% of small business owners reported raising compensation, down 1 point in March after moving up 2 points in February. Meanwhile, 18% of business owners plan to increase compensation in the next three months, down 4 points from February and the lowest reading since July. Pressure on profitability strengthened in March, with positive profit trends falling 11 points from February to a net negative 25%. Among owners reporting lower profits, 32% blamed weaker sales, 19% mentioned usual seasonal changes, 10% cited increased material costs and 7% noted labor costs. Meanwhile, 5% reported their last loan was harder to get than previous attempts, unchanged from February, and a net negative 3% of owners cited paying a higher interest rate on their most recent loan, unchanged from the prior month.

The outlook for general business conditions fell 7 points to 11%, remaining above the historical average of 4%. Furthermore, expectations for better business conditions are down 10 points from March 2025. At the same time, 11% reported that it is a good time to expand their business, down 4 points from February and a rather weak reading compared to times of economic expansion. Overall, growth has slowed and uncertainty has risen, as small business owners anticipate worse conditions in the future.

U.S. import prices increased 0.8% in March, after rising 0.9% in February, with higher nonfuel and fuel prices driving the increase. Over the year, import prices advanced 2.1%, the largest 12-month increase since December 2024. Meanwhile, U.S. export prices climbed 1.6% in March, driven by higher prices for nonagricultural and agricultural exports. Over the past year, export prices rose 5.6%, the largest over-the-year increase since November 2022.

In March, U.S. import prices for manufacturing rose 2.8% over the year, as most of the industry experienced price increases. Primary metal manufacturing experienced the most significant over-the-year U.S. import price increase in February, surging 35.1%. On the other hand, the greatest yearly decline in U.S. import prices occurred in beverage and tobacco product manufacturing, which fell 12.1% from March 2025. Meanwhile, U.S. export prices for manufacturing in March advanced 4.9% over the year, with primary metal manufacturing export prices exhibiting the largest rise (39.1%).

Fuel import prices climbed 2.9% in March, the largest monthly rise since January 2025, after increasing 2.4% in February. Higher prices for petroleum more than offset lower prices for natural gas. Import prices for petroleum and petroleum products climbed 9.4% in March. However, prices for fuel imports fell 6.0% from March 2025. At the same time, natural gas prices plummeted 71.0% in March and 49.8% over the year.

Nonfuel import prices increased 0.6% in March, after advancing 0.8% in February. Higher prices for nonfuel industrial supplies and materials, capital goods, consumer goods and foods, feeds and beverages drove the increase. The price index grew 2.8% over the past year, the largest over-the-year gain since October 2022.

After moving up 0.9% in February, agricultural export prices rose by a similar amount in March. Over the past 12 months, agricultural exports advanced 3.4%. Meanwhile, nonagricultural exports stepped up 1.7% in March. Higher prices for nonagricultural industrial supplies and materials more than offset lower prices for capital and consumer goods. Over the past year, nonagricultural export prices climbed 5.8%.

Manufacturing activity in New York state expanded in April, with the headline business conditions index rising 11.2 points to 11.0. The new orders index increased 12.9 points to 19.3, while the shipments index soared 27.1 points to 20.2, the highest level for both indexes since 2023. Unfilled orders decreased 1.7 points to 9.1, while inventories moved down 1.8 points to 5.1, indicating business inventories are growing but at a slower pace. Delivery times shortened, ticking down 1.6 points to 12.1, and supply availability worsened, declining 6.2 points to -10.1.

Employment increased in April, with the index for the number of employees rising 4.0 points to 9.8. At the same time, the average employee workweek jumped to 13.7 from 1.9, signaling a significant increase in hours worked in April. The prices paid index rose 14.4 points to 51.0, while the prices received index edged up 0.4 points to 21.8, reflecting a faster pace of increase in both prices paid and prices received.

In April, firms’ optimism regarding the future declined but remained positive, with the future business activity index falling 11.4 points to 19.6. In the next six months, new orders are expected to rise but at a slower pace compared to the prior month at 24.8. The future employment index moved down 4.1 points to 18.1, suggesting an anticipated slower pace of employment growth over the next six months. Meanwhile, input and selling price expectations are forecasted to increase at a faster pace, rising from 43.1 to 61.6 and from 32.4 to 38.6, respectively. Furthermore, capital spending plans weakened in April, falling from 21.6 to 13.1.

In April, Philadelphia’s regional manufacturing activity expanded for the fourth consecutive month, with the index for general business activity advancing from 18.1 to 26.7. This month, 32.6% of firms reported increases in activity, while only 5.9% noted decreases. The index for new orders jumped from 8.6 to 33.0, while the shipments index climbed 11.8 points to 34.0. Meanwhile, the employment index turned negative, falling 5.9 points to -5.1, and the average employee workweek index moved up from 2.8 to 7.7.

The prices paid and prices received indexes both rose in April, increasing from 44.7 to 59.3 and from 21.2 to 33.5, respectively. 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, most indicators showing future expectations for growth declined but remain elevated. After falling 2.8 points in March, expectations for future business activity ticked up 0.8 points to 40.8 in April. The gain came from a decline in the proportion of firms expecting a decrease in activity (15.7%). At the same time, the proportion of firms expecting an increase in activity (56.5%) moved up in April. The future new orders index dropped from 49.6 to 45.7, while the capital expenditures index climbed from 25.8 to 35.2. The future prices paid index dipped from 53.7 to 50.2, while the future prices received index rose from 38.4 to 50.2. Additionally, the index for future employment moved down from 40.4 to 35.9.

In April, firms were asked about changes in wage rates and compensation packages as well as expectations for input and labor costs. Of those responses, 46.2% of firms indicated wage rates and compensation costs have increased over the past three months, 53.8% reported no change and no firms indicated a decrease during that time. When asked about input and labor costs, firms expect higher energy costs (up 5% to 7.5%), higher cost of health benefits (up 4% to 5%) and smaller increases in other categories. Notably, 19.2% of respondents anticipate both energy and health benefits costs to rise by more than 12.5% during 2026.

The Producer Price Index for final demand (also known as wholesale prices) rose 0.5% over the month in March, unchanged from the 0.5% increase in February and below expectations. Over the year, producer prices jumped 4.0%, up from 3.4% in February and the largest 12-month increase since February 2023. Meanwhile, prices for final demand excluding foods, energy and trade services ticked up 0.2% over the month in March after rising 0.5% in February. Prices for these goods advanced 3.6% from March 2025.

Within final demand, prices for services were unchanged in March, after advancing 0.3% in February. Meanwhile, prices for goods soared 1.6% in March, the largest monthly increase since August 2023, after moving up 1.0% in February. Within the final demand services index, prices for airline passenger services rose 2.8%, helping offset the 6.0% drop in the margins for food and alcohol wholesaling. Within the final demand goods index, prices for gasoline surged 15.7%, accounting for nearly half of the March increase. At the same time, prices for fresh and dry vegetables fell 10.7% from February but were up 49.0% from March 2025.

Prices for processed goods for intermediate demand rose 2.6% in March, the largest monthly increase since May 2022, after moving up 1.6% in February. Within the index, prices for diesel fuel soared 42.0% after rising 13.1% in February. Meanwhile, prices for primary nonferrous metals and secondary nonferrous metals were up 67.0% and 41.0% year-over-year, respectively. Over the year, prices for processed goods for intermediate demand rose 6.6%, the largest annual increase since November 2022.

Meanwhile, prices for unprocessed goods for intermediate demand decreased 2.6% in March, the largest decline since April 2025, after moving up 4.8% in February. The monthly decline was led by a 51.7% drop in natural gas prices, which are down 8.6% over the year. In contrast, prices for crude petroleum jumped 20.2% in March and 12.3% from March 2025. Over the year, prices for unprocessed goods for intermediate demand rose 4.9% after moving up 3.5% in February.

Industrial production declined 0.5% in March, while manufacturing output ticked down 0.1% after moving up 0.4% in February. At 97.3% of its 2017 average, manufacturing production advanced 0.5% from March 2025. Capacity utilization for manufacturing was 75.3%, down 0.2 percentage points from February but up 1.1% over the past year. Capacity utilization remained 2.9 percentage points below its long-term average from 1972 to 2025.

In March, production for most major market groups slowed. Consumer goods production decreased 1.0%, while business equipment output ticked down 0.3%. The contraction in consumer durables (down 1.8%) was led by the output of automotive products falling 2.8%. Meanwhile, the index for consumer nondurables moved down 0.8%, led by a drop in the index for clothing (down 1.0%). Among business equipment, the 2.2% decrease in transit equipment led the decline. At the same time, the index for materials edged down 0.6%, while the index for construction supplies rose 0.4% and the index for business supplies ticked down 0.1%.

Durable goods manufacturing fell 0.2% in March but increased 1.8% from the year prior. The largest monthly decline occurred in motor vehicles and parts (down 3.7%), while electrical equipment, appliances and components registered the largest gain (up 1.1%). Meanwhile, led by a 2.3% decrease in printing and support output, nondurable manufacturing edged down 0.1% in March and 0.6% from March 2025.

51�Թ���: Sen. Lankford, H.R. 1 permanently restored 100% bonus depreciation for qualifying property acquired after Jan. 19, 2025, reversing a phasedown that had reduced the deduction to 40% in 2025 and would have eliminated it by 2027. As a member of the Senate Finance Committee, what does permanent full expensing mean for manufacturers making long-lived capital investment decisions, and how does permanency change their planning horizon relative to a temporary extension?

Sen. Lankford: Permanency is the difference between short-term tax relief and long-term economic certainty. Manufacturers are not making one-year decisions. They are making 10-, 20-, even 30-year capital allocation decisions on facilities, heavy equipment and production lines. When full expensing is temporary or phasing down, it distorts those decisions and often forces companies to either accelerate investments inefficiently or delay them altogether.

By making 100% expensing permanent, we are giving manufacturers confidence that the tax treatment will be consistent across the full lifecycle of an investment. That stability lowers the cost of capital, improves after-tax returns and allows companies to plan rationally instead of reacting to arbitrary deadlines.

That is why I have pushed for permanency through efforts like the ALIGN Act, which was included in the Working Families Tax Cuts Act, because pro-growth policy only works if businesses can rely on it over the long term.

51�Թ���: During the phasedown years, when bonus depreciation fell from 100% to 80% to 60% to 40%, manufacturers reported delaying or canceling major capital purchases because the economics no longer worked as favorably. Now that 100% expensing is restored permanently, what evidence are you seeing—in Oklahoma or nationally—that manufacturers are moving forward on investments that were on hold?

Sen. Lankford: What we are hearing, both in Oklahoma and across the country, is that the return to full expensing is beginning to unlock projects that were sitting on the sidelines. During the phasedown, when expensing dropped from 100% to 40%, many of those investments simply didn’t pencil out.

That lines up with what we know about Oklahoma’s economy. The state is heavily concentrated in capital-intensive sectors like oil and gas, manufacturing and aerospace. Oil and gas alone accounts for a significant share of state GDP, and when you include the broader supply chain, it touches more than a quarter of the economy. These are exactly the types of industries where cost recovery drives investment decisions.

In practical terms, that showed up in delayed energy projects, deferred equipment purchases and slower expansion of processing and manufacturing facilities. In manufacturing and aerospace, companies stretched the life of existing equipment and postponed automation upgrades.

Now, with full expensing permanently restored, those same businesses are revisiting projects. That includes moving forward on pipeline investments, placing new equipment orders and advancing plant and infrastructure upgrades. The key shift is that companies are no longer trying to time the tax code. They are making decisions based on operational need and long-term growth.

51�Թ���: H.R. 1 also raised the Section 179 expensing cap from $1 million to $2.5 million, providing a complementary benefit particularly for smaller manufacturers. The legislation also expanded bonus depreciation to manufacturing facilities. How do bonus depreciation, the enhanced Section 179 and the new deduction for factories work together to drive capital investment across manufacturers of all sizes, and what are you hearing from businesses about how these provisions are impacting them?

Sen. Lankford: For smaller and mid-sized manufacturers, Section 179 is often the tool they use the most. These are businesses that are upgrading equipment, adding a new machine or expanding part of their shop floor. They are not doing massive projects all at once. They need something simple, predictable and easy to use. Increasing the cap means more of those everyday investments can be written off immediately, which helps with cash flow and makes it easier to keep reinvesting.

For larger manufacturers, the scale is different. They are looking at bigger equipment purchases, full production lines and major upgrades across facilities. Bonus depreciation matters here because it allows them to expense those larger investments upfront. When you are talking about large equipment investments, that timing difference can influence whether a project moves forward now or gets pushed out.

The addition of expensing for manufacturing facilities is a big step forward. For a lot of companies, the building is one of the most expensive parts of the project, not just the equipment inside it. Whether it is a new plant or expanding an existing one, being able to expense both the facility and the equipment reflects the full cost of what it takes to grow.

When you put all of that together, it creates a system that works for manufacturers at different sizes and at different stages. It supports the smaller, steady investments and the larger, long-term projects. It does not solve every challenge, but it removes a major barrier and lets companies make decisions based on what they actually need to grow.

51�Թ���: Thank you, senator. What can 51�Թ��� members do to help manufacturers understand and act on the restored bonus depreciation and enhanced Section 179 provisions?

Sen. Lankford: The most important thing 51�Թ��� members can do is make sure permanent expensing actually reaches the shop floor. A lot of small manufacturers may not have heard about what changed, and even if they have, they may not immediately connect a tax provision to a real equipment decision. It’s a simple but important message: if you’ve been holding off on a new piece of equipment, talk to your accountant now, because you may be able to write off the full cost this year. Pro-growth policy only delivers if manufacturers know about it and use it, and that’s where 51�Թ��� can make a real difference. That’s what will drive long-term investment, create jobs and grow local economies.

Washington, D.C. – On the first Tax Day since passage of H.R. 1, 51�Թ��� President and CEO Jay Timmons released the following statement:

“This Tax Day, manufacturers now have a permanent, pro-growth tax code that allows our industry to compete and win. 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, which 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, serving as rocket fuel for manufacturers.

“Manufacturers’ optimism is on the rise, and they are ready to keep building, investing and leading—but that requires certainty across the board to take full advantage of H.R. 1’s transformative provisions. President Trump and Congress went above and beyond to deliver tax certainty for manufacturers, and we look forward to continuing to work with them to build on this progress—ensuring certainty and lowering the cost of doing business—so that manufacturers can deliver the greatest manufacturing era in American history.

“This Tax Day, the message is clear: when Washington gets the tax code right, manufacturers deliver.”

This week, Timmons published a joint op-ed in the Washington Examiner with House Majority Whip Tom Emmer (R-MN) on the pro-growth tax reforms of H.R. 1. Read it .

Manufacturing Wins

Learn more about how tax reform is bolstering manufacturing in America:

• Ketchie CEO Credits Trump’s “Beautiful Bill” with Helping Her Machine Shop Prosper
• Brunswick Revs the Engine on Innovation and U.S. Investment
• Tax Reform Delivers “Biggest Investment in Company History” for Marlin Steel
• J&J Makes Major Investment in North Carolina Thanks to Tax Reform
• Sylvamo to Congress: Tax Reform Made Manufacturing Success Possible

Background

Prior to final passage of H.R. 1 in 2025, the 51�Թ��� activated manufacturers in America—engaging shop floor workers, plant managers, executives and state and local partners nationwide­—as part of the “Manufacturing Wins” campaign. With a coordinated public advocacy campaign, which included outreach to congressional offices both in district and in Washington, targeted social media drives, video testimonials and local media op-eds, the 51�Թ��� made the case for this bill directly to members of Congress and the American people. These collective voices underscored how preserving and expanding key tax provisions translates into growing businesses, creating jobs and powering stronger communities.

In January 2025, the 51�Թ�����released a landmark EY study��on the economic consequences of failing to renew the pro-manufacturing provisions of the Tax Cuts and Jobs Act. The 51�Թ��� was joined by��Senate Finance Committee Chairman Mike Crapo (R-ID),��House Ways and Means Committee Chairman Jason Smith��(R-MO)��and��House Majority Leader Steve Scalise��(R-LA)��for a��Capitol Hill press conference��highlighting the study.

KEY FACTS: If Congress had failed to preserve tax reform in 2025, the U.S. would have risked:

• 5.9 million lost jobs;
• A $540 billion reduction in employee compensation; and
• A $1.1 trillion shortfall in U.S. GDP.

-51�Թ���-

The 51�Թ��� 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 51�Թ��� 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 51�Թ��� or to follow us on Twitter and Facebook, please visit .

Washington, D.C.��–��51�Թ��� President and CEO Jay Timmons issued the following statement congratulating former 51�Թ��� Board Chair Jim Fitterling on his appointment as executive chair of the board of Dow Inc.

“Dow’s announcement marks an important leadership transition for the iconic manufacturer and an opportunity to recognize the extraordinary leadership of Jim Fitterling.

“Jim is a leader of substance and integrity—clear in his direction, consistent in his approach and deeply committed to the people and communities that power manufacturing. As 51�Թ��� Board chair, he helped strengthen the association’s impact and build consensus across the industry around a competitiveness agenda that is delivering results—from historic tax reform implementation to regulatory modernization and a growing consensus around permitting reform as essential to unlocking investment, jobs and growth in America.

“Jim’s imprint on America’s future has extended well beyond policy. He has been a driving force behind efforts to inspire the next generation of manufacturers. Through his leadership, the Creators Wanted campaign became the most successful workforce initiative in modern manufacturing history—reaching millions of students, parents and educators and changing perceptions about careers in our industry. He approached that work with a straightforward message: if you want to design, build and create, manufacturing offers that opportunity.

“He carried that same commitment into his strong support for the Manufacturing Institute as a respected advocate for bringing one’s authentic self to the workplace, helping broaden the impact of the MI in developing talent and opening doors for more Americans to pursue careers in modern manufacturing.

“Jim leaves behind a stronger Dow, a more competitive manufacturing industry and meaningful progress in building the workforce that will define the future of manufacturing in the United States. On a personal level, he has been a trusted partner, counselor and a leader who consistently pushed for excellence and results on behalf of manufacturers.

“As we continue our historic charge with Jim as an Executive Committee member of the 51�Թ���, manufacturers congratulate Karen Carter on being named CEO of Dow. Karen is a proven and accomplished leader, and we look forward to working with her as she builds on Dow’s momentum and continues advancing manufacturing in the United States and around the world.”

-51�Թ���-

The 51�Թ��� 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 51�Թ��� 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 51�Թ��� or to follow us on Twitter and Facebook, please visit

733 10th St. NW, Suite 700 • Washington, DC 20001 • (202) 637-3000

New orders for manufactured goods were virtually unchanged in February after staying the same in January. Meanwhile, new orders for manufactured goods increased 3.7% over the year. When excluding transportation, new orders rose 1.2% over the month and 1.7% year-over-year in February. Orders for durable goods declined 1.3%, following a 0.4% decrease in January. Year to date, durable goods orders jumped 8.2%. Meanwhile, nondurable goods orders grew 1.5% in February after advancing 0.5% in January. On the other hand, nondurable goods orders edged down 0.6% over the year.

In February, the largest monthly increase occurred in mining, oil field and gas field machinery, which surged 14.2% after a 7.0% gain in January. The largest decline occurred in nondefense aircraft and parts, which plummeted 28.6% after falling 1.7% the prior month. The largest over-the-year changes occurred in nondefense aircraft and parts (up 60.8%) and photographic equipment (down 15.6%).

Factory shipments rose 1.4% in February, after increasing 0.7% in January. Shipments grew 2.7% over the year. Shipments excluding transportation similarly increased 1.4% in February, following a 0.5% uptick the previous month. Shipments for durable goods similarly moved up 1.4% in February, following a 0.9% rise in January, and are up 6.2% year to date. Meanwhile, nondurable goods shipments climbed 1.5%, after advancing 0.5% the prior month, and have declined 0.6% year to date.

Unfilled orders for all manufacturing industries edged up 0.1% in February, after increasing 0.6% in January. Unfilled orders over the year jumped 11.0%. Inventories inched up 0.1% month-over-month and 0.7% year-over-year. The inventories-to-shipments ratio declined from 1.55 in January to 1.53 in February. The unfilled orders-to-shipments ratio for durable goods moved down to 6.92 in February from 6.99 in January.