August 2026 Volume 8

OPERATIONS & MANAGEMENT

2026 FORGING PERFORMANCE LOOKING UP By Nicole Jaeckel

Capacity Barometer for North American Manufacturers

Respondents More Optimistic About 2026 The capacity measures how businesses are feeling about the industry as well as their profit levels, utilization, and revenue. Manufacturers are more optimistic considering the general outlook for their company in Q2 than any previous Q2 since 2022. Q2 of 2026 had 3% of respondent as very optimistic, 41% optimistic, and 45% neutral. Even with the most optimistic Q2 in a while, the percent of respondents who are neutral about their company outlook has increased, stemming from a decrease in the percent who are pessimistic or optimistic. Top concerns like higher cost of doing business, raw materials tariffs, and continued inflation still plague manufacturers and remain top of mind during Q2, just as they were in Q1. For the past three years the top five concerns have remained steady boiling down to the higher cost of doing business as the main concern. Tariffs: A Continued Concern This study was completed after the IEEPA tariffs were removed and the refund process was announced. 31% of respondents are uncertain if they are eligible for a refund, 25% are ineligible, 29% are directly eligible for refunds as the importer of record, and 15% are indirectly eligible for refunds. Tariff policy is volatile, fast changing, and difficult to forecast, making traditional long range planning unreliable. Don't wait for the situation to stabilize, assume ongoing disruption and build plans accordingly. Despite uncertainty, manufacturers need to drive sales and run strong, stable operations by improving internal processes and protecting margins through efficiency improvements. Material Costs Increase for Production Facilities The increase in material costs from 2024 to 2025 does not cover the full impact of tariffs. Tariffs appear in different places on the income statement depending on the company. Additionally, material costs are rising due to a shift from "lowest-cost global sourcing” to “risk-adjusted, policy-driven sourcing,” combined with persistent inflation and commodity volatility. Managing financials, utilization, and efficiency within the shop is key to a continued successful business strategy.

Wipfli recently completed the second 2026 Manufacturing Capacity study with over 450 total participants. The study was conducted in April and May 2026. Study respondents varied in size, ranging from less than $5M to over $75M annually. Wipfli had respondents from every U.S. region, Canada, and Mexico, with most respondents from the Midwest. Participation continues to increase with representation from forgers, metalformers, die casters, plastics processors, tool builders, gear manufacturers, bearing manufacturers and fasteners. Q2 2026 included a wider benchmarking study, while still looking at capacity in other process types. While forgers did not have a Q2 study, the findings from the Q2 capacity are still relevant to forging. The metrics referenced throughout this article focus on multiple processes across manufacturing rather than forging specific data points to showcase how the overall health of the manufacturing industry is doing. The Economy is Recovering From 2025 The economy has recovered nicely throughout 2026 with higher GDP growth, lowering interest rates and inflation beginning to come down. Inflation still remains above the Fed’s target of 2%. It briefly snuck below 3% in January and February of this year, but has ticked back above 3% in April and May, with May coming in at 3.09%. Despite some positive recovery, many consumers are still struggling because their wages are barely keeping up with inflation. Although many consumers are struggling, the top 20% of earners continue to drive demand for manufactured products. This is shown by consistent durable goods demand in 2025 and a strong start to 2026, with recent increases driven largely by aerospace and a rebound in agriculture. Increases are paired with better than expected quote levels in infrastructure, defense, and commercial aerospace. Manufacturers are feeling the increase demand in those industries, and overall with 60% of respondents expecting revenue increases in 2026.

Question: What are you experiencing related to quote activity today compared to last quarter in your top industries?

46 FIA MAGAZINE | AUGUST 2026