Archive: Aug 2026

What We’re Seeing Behind Manufacturing Cost Increases in 2026: A Machine Shop Owner’s Perspective

By Kristin Carlson, president of Peerless Precision

We’re more than halfway through 2026, and it’s been a good year so far at Peerless Precision. But outside our shop’s walls, manufacturers are facing a growing list of cost pressures. Tariffs, fluctuating material prices, energy costs, inflation, and price increases from outside processors are all affecting manufacturing costs and machine shop pricing.

Those changes are frustrating for customers. And they are frustrating for us, too. At Peerless Precision, our approach is to be transparent about what has changed and help customers find practical ways to manage costs.

What Is Behind Cost Increases?

Many of the major stories in manufacturing, like tariffs and energy costs, started before 2026, but we’ve felt their effects in different ways this year. Some outside processors, for instance, have had to increase prices to keep up, adding energy surcharges or other fees associated with industry requirements. We’ve even seen some vendors have to adjust pricing multiple times this year.

That can create a difficult quoting situation. On some occasions, we may receive a supplier quote, use it to price a job, and then learn weeks later that the vendor’s lot charge has changed. Sometimes that means absorbing a price increase ourselves if we’ve already accepted the purchase order.

Transparency in Price Changes

When a returning customer sees a higher price, I do not want to send over a revised quote and leave them guessing. I explain what is driving the change.

It may be changing market conditions, like a higher material quote or an increase from an approved outside processor, or it could be fundamental cost drivers, like a lower order quantity. To show the effect lower quantities can have, I will sometimes quote multiple quantities so the buyer can see different price per part options.

Why Switching Suppliers Isn’t Always an Option

We regularly review supplier pricing and, if it makes sense, we will pursue better options. At the same time, we have built a trusted supplier network over many years, so any change has to offer a true improvement in areas like cost or turnaround time.

Additionally, as an AS9100 Rev. D machine shop with a range of aerospace and defense customers, changing an outside processor is not always as easy as calling another vendor. If customers require us to use processors from an approved supplier list, a new supplier may need to complete audits and customer approval before it can work on a particular part or process. That can take months.

What Buyers Can Do

The most useful cost lever buyers have is often quantity. Larger production runs allow setup, programming, purchasing, and outside-processing costs to be spread across more parts.

I encourage customers to look beyond the next few months and consider their likely demand over an entire year. Blanket orders can reduce the per-piece price while allowing deliveries to be scheduled in smaller releases. Inventory programs can provide similar benefits by keeping parts available without requiring the customer to receive the entire order at once.

And if customers have any long-term material agreements or preferred pricing with suppliers, it’s helpful to let us know. In some cases, we may be able to purchase material under that agreement and pass the advantage through to the job.

Planning Through an Unpredictable Market

No one can predict where tariffs, material prices, or energy costs will be next year. But what I can promise is that we’ll be transparent with you about their impact on pricing.

We’ll always work with you to identify the factors we can influence and recommend options that could reduce the total cost. In an unpredictable market, open communication is one of the most valuable things a manufacturing partner can provide.

If you are looking for a precision machine shop that will help you think beyond the next purchase order, request a quote from Peerless Precision today.