There’ve been a lot of changes in industry this year, from shifting tariffs and a changing economy to evolving workplaces — these are the manufacturing trends that have dominated 2025.
Artificial Intelligence
Advanced manufacturing technologies have been a cornerstone of manufacturing innovation for years. But with artificial intelligence (AI) proven to be a viable tool for manufacturing companies, the adoption of AI has risen sharply in the manufacturing sector, and it really took off in 2025.
Forging the Future of Manufacturing With AI
As a practical manufacturing application, AI provides manufacturing executives with actionable insights, driving them to optimize operations. AI-powered systems are making manufacturing companies the most efficient and capable they’ve ever been.
The two main types of AI technologies implemented at industrial facilities include generative AI and agentic AI. Generative AI was the original AI technology that helped companies quickly identify and resolve complex issues. Agentic AI is the “new kid on the block” technology that allows manufacturers to leverage AI for more complex multistep workflows.
AI has a range of manufacturing applications that offer multiple benefits to companies, including assisting with research and development, speeding up engineering and design cycles, helping to train and upskill employees, and improving overall production efficiency. Agentic AI can take this a step further with autonomous AI agents that have sophisticated decision-making skills, and can reason and actively learn.
With the emphasis on innovation and digitally connected operations, AI has almost become an essential technology for manufacturers. This mostly applies to larger corporations and digitally driven companies, but AI is certainly a trend for the entire manufacturing sector. As with automation, AI is proving to be a valuable tool that must be paired with the ingenuity of human workers to truly maximize its potential.
Agentic AI Can Transform Manufacturing
A new report by Deloitte from September 2025 highlights how agentic AI can transform the manufacturing industry. This type of AI consists of autonomous AI agents that can work independently alongside a human workforce with little to no supervision. The survey found that a quarter of manufacturing companies are already looking to adopt agentic AI within the next few years.
Agentic AI has the potential to transform every part of the value chain, from designing to distribution and engineering to production. So, where should manufacturers start with this technology? Deloitte recommends creating a roadmap that focuses on implementing agentic AI solutions that would have the most impact and then scaling from there.
It’s also important to prepare the workforce for the introduction of AI and outline how it can improve their jobs. With the capabilities of agentic AI, manufacturers are going to have to rethink how they can best use this technology to redesign their operations and augment their current workforce. Agentic AI is more than just automation; it’s the key to truly optimizing and digitizing production operations.
Tariffs
Higher tariffs don’t seem to be going anywhere, so the manufacturing industry has had to learn how to mitigate extra costs this year while remaining successful and competitive.
The Response to 2025 Tariffs
The tariff situation has calmed in the later months of 2025, but the disruption of the on-again, off-again, ever-evolving tariff regulations earlier this year may have had a lasting impact on global supply chains.
Notably, between January and April 2025, the average levy paid on imported goods into the United States increased from 2% to 24% — a staggering rise that represents the highest U.S. trade-weighted average tariff in over a century.
The strong international reaction to tariffs set by the U.S. administration has the potential to reshape the global economy. As a result, several other countries are seeing a rise in residents looking for products made locally, or at least within their continent.
The U.S. is encouraging this as well, with the tariff increase partly meant to spur reshoring efforts. But reshoring and nearshoring are often multiyear initiatives, and the current tariffs are a threat to some American industries — especially the automotive sector. These tariffs also have the adverse effect of discouraging foreign companies from doing business with or in the U.S., and potentially alienating the country’s STEM talent—pushing them to look abroad for work and research opportunities.
Additionally, the reshoring and nearshoring trend goes both ways, with manufacturers in other countries looking to move suppliers and/or operations closer to their headquarters and outside of the United States.
The initial reactions to the United States’ reciprocal tariffs on other countries have been largely negative. Foreign companies have taken different actions in attempts to mitigate the costs, including increasing prices, renewing supplier negotiations, cutting products and pausing deliveries to the U.S. Other countries have also had varied responses, from raising tariffs on imports to taking a wait-and-see approach to pursuing active dealmaking with the American administration.
Regardless of the response, it’s clear these tariffs are going to have a lasting impact on manufacturing and supply chains for years to come, and it is yet to be seen exactly how or if the tariffs will bring more manufacturing back to the U.S.
Manufacturing’s Tariff Test
Prior to 2025, tariff fees were more predictable. Throughout this year, manufacturers have had to contend with tariff policies that seem to change by the day. A major manufacturing trend of 2025 has become how to effectively manage tariffs and minimize their impact on supply chains.
Tariff regulations are already complex, and being thrown into uncertainty with seemingly ever-changing tariffs can be detrimental to manufacturers’ bottom lines. Larger companies may have a team dedicated to knowing the country’s harmonized tariff schedule (HTS), while smaller manufacturers have to get by with one or two people who perform tariff management as a small part of their broader responsibilities.
Strategies to mitigate changing tariff regulations and minimize the impact on costs and operations include:
- Having tariff expertise in-house or through a partner.
- Ensuring suppliers are transparent and show tariff costs up-front to avoid hidden fees and surprise import bills.
- Using the price paid on the first sale of an import to take advantage of the lower sales value at customs.
- Altering a product design or manufacturing process in a way that reduces the tariff cost and/or qualifies for a lower-cost HTS classification.
- Delaying tariff costs by leveraging a staging location for imports to reassemble or alter products with the goal of achieving a lower-cost tariff designation.
- Paying duty up-front and filing for duty reimbursement when a product is reexported.
In addition to these strategies, manufacturers must build more resilient supply chains through diversification, adopting advanced technologies, and identifying opportunities to design for manufacturability to lower tariff costs. Tariffs aren’t going anywhere, so manufacturers need to learn how to treat them as a permanent variable in order to stay profitable and competitive.
Workforce Shortage and Skills Gap
The manufacturing sector has faced a labor shortage for the past few years, as well as a growing skills gap. Solving this challenge has been a focus for manufacturers and will continue to be a trend beyond 2025.
Navigating Manufacturing’s Talent Challenges
Manufacturing employers are dealing with labor shortages, an aging workforce, and a lack of skilled workers, including both high-tech specialists and experienced tradespeople. Manufacturers need to rethink how they attract and retain talent to overcome these challenges.
Strategies include:
- Refining compensation — Employers should utilize recent compensation data and explore investing in compensation analytics and benchmarking tools to help align pay with strategic goals.
- Providing extensive benefits packages — Make manufacturing roles more attractive by providing unique benefits, such as health and wellness programs, childcare stipends, and flexible paid time off.
- Upskilling with career training — Training employees is mutually beneficial and can help companies improve retention. This on-the-job upskilling allows employees to feel valued and see advancement in the organization while the company can hone the skills it needs.
- Offering workplace perks and rewards — These can include flexible work hours, paid time off, and, where possible, remote and hybrid work.
Survey: Hiring Challenges As New Trends Emerge
A 2025-26 hiring benchmark report from Criteria Corp. gives some insight into the workforce landscape manufacturers are currently dealing with. This report highlights how hiring is now more challenging across industries, with 71% of manufacturing hiring professionals citing that it’s difficult to find candidates with the right skills.
Additionally, 67% of survey respondents believe there is a talent shortage — and 86% of those respondents are in manufacturing. Despite the bleak outlook, improvement is expected, with 38% of manufacturing respondents believing the talent shortage will improve in the next five years.
Manufacturers have had to navigate some new trends within the hiring process in 2025, including AI usage — both by applicants and employers — and expectations of Gen Z, who have begun entering the professional workforce en masse within the last few years.
These trends will evolve as the manufacturing industry continues to deal with workforce issues, and focuses on how to best attract and retain talent. The Criteria Corp. survey highlights how other sectors are dealing with similar issues and how manufacturers need to stay agile to attract top talent.
Looking Forward to 2026
AI, workforce issues, tariffs, the skills gap — these are just a few of the major manufacturing trends that dominated 2025. All these topics will continue to be a major focus of manufacturers for 2026 and beyond, with tariffs having reverberating impacts on the economy, the workforce shortage continuing, and AI technology adoption increasing over the next few years.
But 2026 may also bring more stability and less uncertainty to the manufacturing industry. While the sector is currently contracting, factors like increased federal funding and interest rate cuts may provide a boost to the manufacturing sector next year.
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