In mid-August President Trump reposted a column by Steve Cortes celebrating a “quiet manufacturing boom.”I’ve owned and operated a manufacturing company for 21 years, and I helped develop the External Revenue Service concept this administration adopted, as the Wall Street Journal reported in January 2025.
I’m still trying to believe this administration can make America the manufacturing superpower of the world again. And that’s exactly why the numbers this “boom” rests on deserve a harder look.
Steve Cortes seems to agree, saying, “it’s important to look at the numbers, the verifiable on-the-ground data sets that prove this new reality.” And he calls the Institute for Supply Management’s manufacturing index “the most-watched gauge of productive activity.” It might be the most watched, but is it telling us the whole story about American manufacturing right now?
Peter Navarro, the White House senior counselor for trade and manufacturing, seems to think so. He called the ISM index his “holy grail.”
And therein lies the problem. If advisers convince leadership manufacturing is booming based on noise, the administration may fail to adjust.
So what is the ISM index? It’s a survey that counts how many purchasing managers say things got better, not how many parts got made. About 400 companies from industries big enough to move GDP are asked, literally, if things are getting “better/same/worse” versus the previous month. A company that grew 1% and another that grew 50% carry the same weight.
It’s a vote, not a measurement of a nation’s production. About three-quarters of American manufacturers have fewer than 20 employees, and almost none of us get to vote in this survey. ISM would say it isn’t running an election; fair, but Washington treats the result like one.
There are five components to the ISM index, equally weighted at 20% each: new orders, production, employment, inventories and supplier deliveries.
The analysis on supplier deliveries is the strangest. It’s inverted. When suppliers fall behind and parts show up late, the index goes up. Read that again. Problems score as strength.
No real manufacturer thinks late deliveries are good. And the President doesn’t either. In January he blasted defense contractors because, in his words, “MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH.” And he’s right. Here’s the absurdity: that very slowness, late deliveries up and down the supply chain, pushes up the very index he’s celebrating. Washington is reading the fever as proof of health.
Washington’s solution since January? Massive defense spending. Census data shows defense capital-goods orders up a whopping 43%.
Defense work is real manufacturing and I’ll take every order that comes through my door. But this is not a real home-market manufacturing surge of value-added goods; it’s a sugar high bought with borrowed money. The July ISM report’s own respondents said it plainly: defense demand is “at an all-time high.”
Civilian core capital-goods orders (nondefense ex-aircraft) are up 10% in nominal dollars. Let me translate. Companies placed orders worth 10% more money than they did over the same stretch last year, but this figure does not tell you if businesses bought more machinery and parts, or if they bought the same amount at a higher price due to inflation.
Vice President Vance said in Maine on August 24, 2026, “We’ve created in just eighteen months, 29,000 new manufacturing jobs.” That works out to about 1,600 jobs per month, but the Bureau of Labor Statistics’ own margin of error on any single month’s manufacturing jobs number is plus or minus 22,400. His entire eighteen-month boom claim is barely bigger than the margin of error on a single month’s report.
Celebrating job numbers way inside the margin of error is exactly the noise problem I’m warning about.
Let’s talk about factory construction jobs. Those jobs are real. They are also construction jobs. The government’s code for building factories is NAICS 236210, and it sits in the construction sector, not manufacturing. What Washington is celebrating is a construction boom dressed up as a manufacturing boom. Maybe manufacturing comes next. I hope so. But the CNC machinist holding .0005” tolerances in heat-treated 4140 steel on a 5-axis lathe is a world of skill sets away from the crews pouring the concrete, as honorable and hard as that work is. Different trades, different payrolls, different booms. Call it what it is.
What about the idea that manufacturing will boom if we just get these factories built? Well, I had a record sales month in July, and I still don’t feel like things are booming because of a little thing real business owners know called margins.
The July ISM report has the Prices Index at 71.1, deep in cost-inflation territory (50 is neutral). The August report, released September 1, holds it at exactly 71.1 again, the 23rd straight month of rising prices. The purchasing managers are hollering about costs every single month. But prices are not one of the five components; the headline leaves them out. That’s not improper; it’s how an activity index works. But when Washington quotes the survey, it’s skipping the page where the pain is.
My friend Wil Lambert, owner of Formed by Design LLC machine shop, said this about his margins: “Every input in manufacturing has nearly doubled. My cost of the job for 304 stainless rose from 8% to 24% in a year, making that part unprofitable for me to produce now.”
Do you like working harder for less money? I don’t. But that is the state of American manufacturing.
And there is no end in sight. More factories being built? Hooray! That’s one of the goals. But more materials will get consumed, driving prices up further.
Even more galling to an actual business operator, this increase in prices is being deployed as the signal of a manufacturing renaissance. Vice President Vance said on August 24, 2026, “Did you know demand for metal cutting and machine tools has hit its highest level in almost forty years in the United States of America?”
And here is what those record sales actually look like from inside the numbers. Machine-tool orders just set a record: $3.44 billion in the first half of the year, the biggest dollar total since the industry started counting in 1998. Buried in the same report: American shops bought 2.6% fewer machines than the six months before. Record money, fewer machines. Cutting-tool shipments are up 31.7% over last year, but the president of the U.S. Cutting Tool Institute says much of that increase is “inflation resulting from ‘skyrocketing’ raw material prices.” Same tools, higher price tags. Tungsten, the raw metal behind carbide cutting tools and the backbone of subtractive manufacturing, is up more than 400% in about a year.
Washington reads these dollar records and sees a boom. A shop owner reads them and sees the invoice going up. Dollars are not production, and nobody on a factory floor confuses the two. American-made goods already carried a reputation for being too expensive. That reputation is going on steroids.
I can hear economists crowing about the fact that the guy who helped develop the External Revenue Service is whining about the increase in prices. But this would skip the advice I gave in my book: tariff funds must be used to rebuild American manufacturing capacity. The foundation of capacity in manufacturing is raw materials.
In two visits to the White House I presented solutions, starting with the fact every manufacturer knows: automation has shrunk the human cost of a part, and material is the real cost now. I never heard back.
We can’t base the boom on numbers cherry-picked by academics and consultants. If this administration truly wants to succeed in making American manufacturing boom, it needs to engage the majority of this industry: its small manufacturers. Companies with fewer than 100 employees make up more than 90% of American manufacturing.
The truth is a higher form of support than applause.
