New Jersey Manufacturers Forge Forward

In the face of workforce and tariff-related challenges, manufacturers in the state continue to play a key role in the resurgence of American manufacturing.

By Jim Pytell, Managing Editor On Oct 14, 2025

Manufacturing remains the backbone of America’s economy. The industry drove 9.7% of the entire US gross domestic product in Q1 2025, and in 2024 alone, manufacturers in the US sent $1.6 trillion worth of products to customers around the world.

Including indirect and induced impacts, for every $1.00 spent in manufacturing, there is a total impact of $2.64 to the overall US economy, a figure that represents one of the largest sectoral multipliers in the economy, according to the National Association of Manufacturers (NAM).

And as has been true throughout its history, New Jersey also continues to play a critical role in American manufacturing. With more than 9,000 manufacturers currently operating in the state, the industry contributed $69.6 billion to the US economy last year – ranking 14th nationwide.

More than 236,000 New Jerseyans make their living in manufacturing, earning an average salary of $120,000 a year, the fourth highest in the country. New Jersey also ranks 15th in the nation for manufactured goods exports, selling nearly $38 billion worth of products globally.

Additionally, in August, Gov. Phil Murphy signed a bipartisan bill into law creating the Next New Jersey Manufacturing Program, which includes $500 million in tax credits, marking the largest manufacturing investment in New Jersey’s history.

However, while this momentum is encouraging, the industry continues to grapple with challenges new and old as we head into 2026 and beyond. Roadblocks such as workforce challenges continue to loom large, while new tariffs have caused turmoil to supply chains and impacted manufacturers’ ability to plan ahead.

Workforce Development

“Manufacturing in New Jersey isn’t much different than across the US – our greatest challenge isn’t making what the world needs, it’s making sure we have the people to do it,” Jay Timmons, president of NAM, tells New Jersey Business Magazine.

Indeed, attracting and retaining talent remains a primary business challenge for manufacturers, as indicated by more than 48% of respondents in NAM’s Manufacturers’ Outlook Survey for the second quarter of 2025. Over the next decade, 3.8 million manufacturing jobs will likely be needed in the US, with 1.9 million of those expected to go unfilled.

Peter Connolly, CEO of the New Jersey Manufacturing Extension Program (NJMEP) adds that while encouraging progress is being made in the area of workforce development, gaps remain in critical skills like welding and CNC machining, for example.

“We need targeted support: more direct engagement with manufacturing leaders, and we can help bring that input forward, so policy reflects real industry needs,” he says. He also adds that schools play a key role in motivating students toward careers in the industry.

NJ Pathways Initiative

One way the state is combating workforce challenges head-on is via the New Jersey Pathways to Career Opportunities initiative, which was launched in December 2021 by the New Jersey Council of County Colleges (NJCCC) and NJBIA.

“The goal was to transform how we prepare learners for meaningful careers and how we connect employers to skilled talent,” explains Catherine Frugé Starghill, vice president of NJCCC. 

The initiative, which now has more than 1,800 partners engaged, is connecting students and workers with employers – ensuring access to jobs by aligning the state’s education and training programs with the evolving needs of businesses, including manufacturers. The program offers a comprehensive approach to workforce development, focusing on providing industry-recognized credentials and career opportunities.

“Time and time again, we hear the same thing: ‘We need talent. We need skilled workers. We need partners who understand the changing landscape of the workforce,’” says former NJBIA Vice President of Government Affairs, Elissa Frank. “The work being done in the career pathways program is transformational, responsive and inclusive.”

Tariffs

Of course, finding workers is not the only challenge facing manufacturers today. 

The tariffs announced by the Trump administration earlier this year, though ultimately intended to protect and boost American manufacturing in the long term, have presented challenges for manufacturers in the short term by raising the cost of imported raw materials, disrupting global supply chains, and creating an environment of uncertainty.

“Manufacturers are planners – always looking four, five years down the road. But with tariffs and trade policy shifting unpredictably, some can barely plan quarter to quarter, let alone for the long term,” says Timmons. “We saw the effects this summer: manufacturing production inched up just 0.1% in June, still short of recovering from April’s drop. New orders also declined in June, and outside of aerospace, growth was essentially flat.”

Pennington-based steel distributing company Sullivan Steel Services has felt the impact of tariffs since 2018, when the Trump administration imposed a 25% tariff on imported steel under Section 232 of the Trade Expansion Act. That tariff has since doubled to 50% this past June.

“In the past we had exclusions in place because we had proven that we could not source the specific material we use domestically,” explains Tom Trainer, president and CEO of Sullivan Steel. “This was sensible and worked great, and we avoided paying tariffs – until March when they removed this exclusion process.”

Now his company is subject to tariffs, but is still left with no options to buy the same steel domestically. 

“This increased cost is unavoidable and being largely passed through to US manufacturers, mostly to support Defense and Commercial Aerospace,” Trainer says.

In an effort to combat the tariffs, Trainer says that his company is trying to set up a Foreign Trade Zone within its warehouse to avoid tariffs by re-exporting materials to its customers in Canada, Mexico, and Europe. He says that he has also been holding material overseas in the hopes that the 50% tariff on imported steel gets reduced, if not eliminated entirely.

The NAM Q2 Outlook Survey revealed that 77% of manufacturers cite prolonged and heightened trade uncertainty as their top business challenge. 

“That kind of instability makes it harder to invest, hire and grow,” Timmons concludes. “Our advice is clear: stay agile, diversify supply chains where possible, and advocate for policies that provide the certainty manufacturers need to compete and win.”

To access more business news, visit NJB News Now.

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