Nine U.S. manufacturing industries show divergent pricing behavior since 2021, with some suppliers maintaining price increases while others absorb unmet costs, creating cost-price gaps that range from 12 points in steel to negative 19 points in wood container manufacturing, signaling where procurement teams should negotiate.
- Four industries show output prices above input costs, including iron and steel mills with a 12-point gap and confectionery with the widest gap at 25-28 points above food-manufacturing prices.
- Three industries face cost pressures exceeding prices, with motor vehicle transmission parts running 17% below input costs and wood container manufacturers at 19% below due to tariff impacts.
- New 2025 tariffs intensify pressure, including steel and aluminum duties doubled to 50% and softwood lumber duties in the mid-30% range, adding cost burdens on top of existing gaps.
- Semiconductor manufacturers show a 12-14% cost gap expected to narrow as market conditions adjust and pricing equilibrates.
- Labor and energy contribute less than 3.4 percentage points to total costs, meaning the larger pricing gaps reflect other factors suppliers are absorbing or passing through.
The Procurement Inflation & Negotiation Index from WTP Buynamics shows output prices running above their own input costs in four industries, the reverse in three, where costs climbed faster than prices, one industry close to breakeven, and one where a wide gap should close soon.
“A gap between cost and price doesn't prove a supplier is overcharging. It tells procurement where to start asking questions. We found that pattern running in both directions across nine industries,” says Robert Driessen, founder and CEO at WTP Buynamics. “In some, suppliers may still be holding onto increases from 2021. In others, they're absorbing costs they haven't passed through yet. This is industry-level data, not a read on any one company, so we treat it as a reason to ask, not an answer. Procurement teams now have that data to open the conversation instead of guessing at it."
Key takeaways:
· Since 2025, the United States has imposed new Section 232 tariffs across several industries, including those tracked in the Index. For example, steel and aluminum duties doubled to 50% in 2025, and softwood lumber duties now run in the mid-30% range. Each adds new cost pressure, on top of the gaps the Index has found, in industries where suppliers are not all responding the same way.
● Iron and steel mills. A 12-point gap between output prices and input costs today, down from a 74-point peak in 2021. Output prices remain 68% above where they stood in 2020.
● Confectionery from purchased chocolate. The widest gap in the Index. Cocoa prices crashed roughly two-thirds from their 2025 peak, even as confectionery output prices climbed 42% from early 2024 to a late-2025 peak and are still running 25-28 points above broader food-manufacturing prices.
● Motor vehicle transmission and power train parts. Output prices running 17% below input costs, and the gap is widening as broader input costs keep climbing.
● Semiconductor and related device manufacturers. A 12-14% gap below cost that should begin to close, detailed above.
● All other miscellaneous chemical product and preparation manufacturers. Close to breakeven, at 1.7% below cost.
● Wood container and pallet manufacturers. A 19% gap below cost that, based on analysis, should close within a few quarters, as new softwood lumber tariffs push input costs higher.
● Labor and energy add no more than 3.4 percentage points to total cost in any industry in the Index. This reflects a cost contribution, not a share of the 74-point price gaps shown elsewhere in the Index.
