Machine Shops

The 17,100 machine shops in the US process various materials, such as metal, plastic, or composites, to produce custom parts. Companies may specialize in a particular process (such as lathing) or an industry (such as automotive). Most projects are low-volume and require high precision. The industry consists of small- to medium-sized businesses – no large companies dominate.

Dependence on Manufacturing Sector

Demand for goods produced by machine shops is cyclical and highly dependent on the state of the manufacturing industry.

Dependence on Skilled Labor

Operating machine shop equipment requires a blend of technical knowledge and experience.

Sep 18, 2026 - US-Canada Trade Dispute Expands to Additional Manufactured Goods

• The US expanded tariffs to 50% on additional Canadian goods as Canada's counter-tariffs took effect, Manufacturing Dive reports. New US measures cover products including some steel and aluminum items, metal fittings, and welding inputs, with some additions taking effect September 15. The tariffs apply regardless of whether covered goods qualify for US-Mexico-Canada Agreement treatment, and some duties stack with existing tariffs. Broader tariff coverage increases the number of ways the trade dispute could affect machine shops, including the cost of imported metalworking inputs and demand from customers engaged in cross-border manufacturing. Shops may need to track product classifications and sourcing closely because exposure can vary substantially depending on the materials, components, and finished products moving between the two countries.
• Manufacturers and machine shops ordered more than $3.4 billion in metal-cutting and forming machinery during the first half of 2026, setting a record for the period, according to the Association for Manufacturing Technology and reporting by Modern Machinist. Aerospace manufacturers led buyers in both order value and machine units, while energy-sector demand also supported investment in equipment for manufacturing engines, turbines, and power-transmission equipment. The number of machines ordered across the market declined slightly compared with the second half of 2025, even as order value remained strong, reflecting increased spending on higher-value equipment and automation. Machine shops serving aerospace, defense, energy, and other expanding markets could benefit from stronger customer production, while also facing pressure to maintain comparable machining capabilities and productivity.
• US manufacturing expanded for an eighth consecutive month in August, with the Institute for Supply Management's Manufacturing PMI registering 54.6%. New orders, production, employment, supplier deliveries, and inventories all remained in expansion territory, with fabricated metal products and machinery among the 15 industries reporting growth. ISM also listed steel, stainless steel, hot-rolled steel, metal products, and wire among commodities reported to be more expensive, while steel and tungsten products were reported to be in short supply. Continued manufacturing growth can support machining demand for components, tooling, repair work, and outsourced production. At the same time, higher or constrained metal inputs can complicate quoting and put pressure on shop margins if material costs change before jobs are completed.
• The Pentagon is pressing defense contractors to accelerate weapons production and rebuild depleted US munitions stockpiles, including Patriot and THAAD interceptors used in the war with Iran, according to the Associated Press. Deputy Defense Secretary Steve Feinberg has given industry leaders 21 days to propose faster delivery schedules and increased output for critical weapons, while Pentagon officials say the effort is part of a broader push to strengthen the defense industrial base. Higher defense production could increase demand for machine shop work, including precision-machined components, specialized metals, tooling, and contract manufacturing capacity, while also tightening labor and supply availability. A Center for Strategic and International Studies analysis estimates Patriot inventories have fallen at least 65% since before the conflict, while THAAD stocks remain at least 38% below prewar levels. Funding remains uncertain as Congress debates a proposed increase in Pentagon spending.

Industry size & Structure

A typical machine shop operates out of a single location, employs about 15 workers, and generates about $2.6 million annually.

• The machine shop industry comprises about 17,100 companies that employ 259,000 workers and generate $44.7 billion annually.
• Customer industries include aerospace, automotive, transportation, consumer electronics, and various equipment manufacturers (farm, medical, recreational).
• The industry consists of small- to medium-sized businesses - no large companies dominate.
• Nearly a third (32%) of US machine shops are in California, Texas, Ohio, and Michigan.