With the latest industry outlooks coming out, it’s clear that AI continues to dominate priorities across nearly every industry. Over my career, I’ve seen manufacturing move through major technology waves — each requiring new skills from the workforce. AI is now driving the next wave and raising the importance of workforce readiness even further. Even as AI reshapes manufacturing, people remain at the center and represent the biggest opportunity for competitive advantage. 2026 Manufacturing Industry Outlook
The data makes that clear:
• 80% of manufacturers plan to increase digital investments, but many feel held back by workforce readiness (Deloitte)
• An aging workforce is accelerating the loss of critical skills needed to scale new technologies. (McKinsey & Copany)
• Nearly half of manufacturers lack confidence in their future strategies because their organizational capabilities aren’t keeping pace. (Gartner)
The next productivity leap won’t come from technology alone, but from how well companies align technology with people. Tech and talent both should be strategically addressed to achieve the biggest competitive advantage.
The future belongs to the organizations that develop their people just as intentionally as they adopt new technologies. SME remains committed to making that happen by helping manufacturers—especially small and midsized firms—understand, adopt, and benefit from AI and other emerging technologies.
Read Deloitte’s insight report here: https://lnkd.in/gEU89Aep
In 2025, the US manufacturing industry faced a challenging economic environment. The Institute for Supply Management’s manufacturing purchasing managers’ index remained below 50 for much of the year, signaling contraction in the sector. Costs rose, employment fell,2 and manufacturing construction spending—an indicator of investment in new or expanded facilities—steadily declined (figure 1). These challenges were due in large part to trade policy uncertainty and tariffs. More than three-quarters of manufacturers5 responding to the National Association of Manufacturers 2025 quarterly outlook surveys consistently cited trade uncertainty as their top concern.
Industrials Outlooks
Despite these challenges, there are opportunities for US manufacturers on the horizon in 2026. The passage of a major tax and spending bill, commonly called the One Big Beautiful Bill Act, includes several tax provisions that could lower costs and encourage manufacturing investment. The announcement of additional revised US trade deals, such as those struck with the United Kingdom and Vietnam, could help reduce uncertainty,7 while interest rate cuts might help reignite demand for manufactured goods. Despite the potential for these developments, manufacturers should prepare for multiple economic scenarios: continuation of current market conditions, possible contraction, or renewed growth.
Source: 2026 Manufacturing Industry Outlook
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