U.S. manufacturing and foreign investment show resilience despite economic headwinds

U.S. manufacturing is experiencing growth driven by strong customer demand in sectors such as electronics, appliances, electrical equipment, and machinery. According to Victoria Bloom, Chief Economist for the National Association of Manufacturers (NAM), manufacturing activity has expanded for nine consecutive months in the ISM report. This sustained activity is expected to drive continued hiring as companies seek to meet demand.

However, the sector faces several headwinds, including rising input costs, supply chain disruptions, and trade uncertainty. NAM’s Q3 Manufacturers’ Outlook Survey indicates that while manufacturers remain generally optimistic, they are struggling with increased raw material costs. Geopolitical tensions, specifically in the Middle East, and changing trade policies continue to pressure prices and supply chains.

In the broader economic landscape, the United States has transitioned into a net recipient of foreign direct investment (FDI). While FDI flows moderated in 2025, there was a significant rebound in manufacturing acquisitions and technology investments driven by artificial intelligence. Despite a recent slowdown in total net inflows, first-year spending on business acquisitions and expansions grew by 49%, signaling resilience in the face of tariff and trade uncertainty.