In August 2026, U.S. manufacturing activity remained firmly in expansion territory, with the Institute for Supply Management’s Manufacturing PMI registering 54.6, following July’s 55.6 reading, the highest since May 2022. But the same August report showed supplier deliveries slowing for the ninth consecutive month, while electrical components, electronic components, labor, steel and other inputs remained in short supply. Manufacturing is recovering, but the supply chain beneath it is still under pressure.
The numbers matter because America’s manufacturing revival is being discussed largely through the factories being announced and the capital being committed to build them. But a factory does not operate in isolation. Behind every large industrial facility is a network of smaller manufacturers producing components, machining parts, creating tooling, maintaining equipment and meeting the tolerances and delivery schedules that larger manufacturers depend on.
That is where the reshoring conversation needs to go next. The challenge is not simply whether America can persuade large manufacturers to build domestically. It is whether the United States has enough domestic supplier capacity to support those factories once they are operational.
The federal government increasingly recognizes this gap. In May 2026, the Small Business Administration (SBA) sought input on initiatives to strengthen domestic capacity for critical components and specialized manufacturing, specifically identifying supply-chain choke-points and the need to help existing small suppliers scale. Earlier this year, the SBA also brought small suppliers together with large industrial buyers through a supplier matchmaking initiative.
Those efforts matter because reshoring is not simply a matter of moving an address from one country to another. A factory cannot operate independently of its supplier base. I have seen that reality from the shop floor.
Machine shops can have talented people, strong customer relationships and decades of accumulated knowledge, yet still struggle when their equipment, information systems and processes have not kept pace with the demands of modern manufacturing. The problem is not necessarily a lack of capability. Sometimes it is a lack of infrastructure that allows that capability to scale.
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