New MAGNET research of Ohio manufacturers — a useful microcosm of U.S. industry — shows tariffs are a net negative today: one in three firms report direct sales impacts, roughly 40% say rising material costs are constraining growth, and slightly more firms report tariff-related revenue losses (18%) than gains (15%), with average losses of 16% versus average gains of 9%. The pain is concentrated among small suppliers and proprietary-product exporters (73% of loss-makers) while parts-to-spec OEM suppliers have fared better; reshoring has risen modestly to 9% (from 4% in 2021), severe raw-material strain rose from 7.7% in 2023 to 10.9% in 2025, and innovation is slowing (71% don’t rank new product development in their top three priorities and 25% fewer firms launched products vs. two years ago). With major tariff policies tied up in courts and two-thirds of manufacturers still projecting growth in 2026, the report points investors to a tactical playbook: favor automated, flexible suppliers, reshoring beneficiaries and OEM-part providers, and closely monitor policy outcomes and small-firm distress as catalysts for opportunity or risk.
MAGNET's survey of Ohio manufacturers — presented as a microcosm of U.S. industry — shows tariffs are a net negative today: one in three firms report direct sales impacts, roughly 40% cite rising material costs as a growth constraint, and slightly more firms report tariff-related revenue losses (18%) than gains (15%) with average losses of 16% versus average gains of 9%. Small suppliers are disproportionately affected (some reporting up to 40% revenue loss) and 73% of loss-makers produce proprietary products, while parts-to-spec OEM suppliers are relatively advantaged by selective reshoring. Reshoring activity has increased to 9% from 4% in 2021 but remains limited, and severe raw-material strain rose from 7.7% in 2023 to 10.9% in 2025, interrupting COVID-era recovery. Innovation is slowing: 71% of manufacturers do not rank new product development in their top three priorities and almost 25% fewer firms launched products in 2025 versus two years prior. Two-thirds of manufacturers still project growth in 2026 despite a moderately negative sector sentiment (sentiment_score -0.45) and major tariff policies tied up in courts. The combination of policy uncertainty, concentrated supplier pain, and slower innovation implies differentiated winners (automated, flexible, OEM-focused, reshoring beneficiaries) and heightened small-firm credit and M&A risk.
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moderately negative
Sentiment Score
-0.45
