Indiana manufacturers are absorbing a simultaneous price reset on two of their biggest input categories: steel tariffs have doubled to 50% and Duke Energy Indiana and NIPSCO electric rates are rising in approved phases through early 2026, compressing margins across every product line that depends on metal or power. That's before you account for AI workforce gaps and renewed pressure on the Elkhart RV sector. Here's the current picture — and the questions your team needs to answer with numbers, not guesses.

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50% Steel Tariffs and Duke and NIPSCO Rate Increases Reset Your Cost Baseline

Section 232 tariffs on most foreign steel and aluminum imports doubled from 25% to 50% as of June 2025. The Richmond Fed has identified Indiana as one of the states carrying the heaviest tariff burden due to its concentration in autos, fabricated metals, and machine shops — and for steel product manufacturing from purchased steel, estimated tariff cost exposure has been running around 60% since mid-2025. That hits every time you buy coil, plate, or structural shapes. On the electricity side, Duke Energy Indiana's IURC-approved increase is rolling out in two stages: roughly 8% in February 2025, with another 3% phasing in during early 2026. NIPSCO received approval for a $257 million annual revenue increase; residential bills climbed more than 26% in 2025 alone, and commercial tariffs are tracking the same direction. Natural gas costs are relatively stable — electricity and materials are not. Indiana C&I operators who haven't rebuilt their 2026 and 2027 budgets around these numbers are planning off a cost structure that no longer exists.

AI Promises Major Uptime Gains — But Only If You Can Staff It

Facilities deploying AI-driven predictive maintenance are cutting unplanned downtime by an estimated 20–50%. Computer vision is handling repetitive inspection tasks with higher accuracy, and generative tools are accelerating design and prototyping cycles. The constraint isn't the software — it's whether you have people on your floor who can run it. A 2024 Deloitte and Manufacturing Institute study projects U.S. manufacturing will need 3.8 million jobs filled over the next decade, with roughly half going vacant if workforce challenges go unresolved. Indiana has attracted nearly $15 billion in AI data center investments from AWS, Google, Meta, and Microsoft. The floor workforce is not keeping pace with that build-out. Purdue's Polytechnic Institute and Ivy Tech are building advanced manufacturing and industrial AI curricula, but they need manufacturers to define the specific skills — reading AI-generated maintenance recommendations, interpreting anomaly alerts, recovering systems when a model goes sideways — before the next implementation goes live, not after. Note: Indiana's manufacturing readiness grant program lost its dedicated state funding line in May 2025, making direct industry-to-campus collaboration more important than before.

Elkhart RV Sector Posts a Third Year of Growth — Tariffs Push Back

Wholesale RV shipments reached approximately 342,000 units in 2025, a third straight year of recovery from the 2023 low of around 313,000 units. Indiana now produces roughly 86% of all RVs manufactured in North America, making Elkhart County and the surrounding region the center of that recovery. The new problem: tariffs on both sides. Gulfstream Coach has stated publicly that Elkhart ships approximately $1.7 billion in RVs into Canada each year — a major export outlet that is now inside the tariff environment. The same 50% steel and aluminum tariffs hitting manufacturers are also raising the cost of frames, chassis, and heavy metal components. In May 2025, Thor Industries brands — including Heartland RV, Cruiser RV, and DRV — filed WARN notices covering just under 450 workers across Elkhart, Middlebury, and Howe; including a related closure in Sturgis, Michigan, the total for Thor-connected layoffs crossed 550 workers. Early 2026 shipment and registration data show year-over-year declines in the low double-digit percentage range. The recovery is real — it's also sensitive.

Questions for Your Morning Huddle

Q: Given the 50% steel and aluminum tariffs and approved rate increases from Duke Energy Indiana and NIPSCO, where are our largest combined cost exposures by product line — and what can we do this quarter to reduce that pressure? A: Start with a line-by-line review of steel and aluminum spend by product and map it against the tariff rate. On the electricity side, pull 12 months of bills from both Duke and NIPSCO and identify which facilities carry the heaviest demand and consumption exposure before the next rate phase hits in early 2026.

Q: With tariffs now affecting both Canadian export markets and our steel and aluminum inputs, how are we adjusting our 2026–2027 sales forecasts and sourcing strategies? A: Any forecast still built on pre-tariff assumptions is underestimating risk. Reassess Canadian and Mexican customer volumes, identify alternative markets or product mixes, and get updated pricing from domestic steel suppliers to understand what a sourcing shift actually costs.

Q: What specific AI-related skills will our lines need in the next one to three years, and which local campuses or training partners are we actively working with to build that pipeline? A: The failure mode isn't buying the wrong software — it's deploying it without people who can interpret alerts, recover systems, and validate model outputs. Contact Purdue Polytechnic or your nearest Ivy Tech campus now, before your next implementation goes live.

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