2025 Manufacturing Industry Outlook

In November, Deloitte released its 2025 Manufacturing Industry Outlook. Not unlike previous years, the manufacturing industry and its various entities continue to weather a tough environment. Throughout the year, this has included high interest rates coupled with a widening of skills gaps within a challenging business environment, making it difficult to achieve the desired growth goals.

The November Purchasing Managers Industry (PMI) report found other issues such as falling orders and rising customer inventories, which could signal a need to cut production moving into 2025. One positive being the stabilization of the producer price index for input materials and components, which is still high. Conversely, wages and benefits that make up for total compensation also remain high.

Skills Gap Not Budging

Data shared by the U.S. Bureau of Labor Statistics points toward a stabilization in the labor market, but across the industry fears are still that manufacturing will continue to have challenges attracting skilled talent. Close to 60% of manufacturers surveyed in the National Association of Manufacturers (NAM) outlook survey shared the inability to attract and retain continues to be a top challenge.

Finding better ways to attract and keep is particularly important as investment in U.S. manufacturing holds the potential for longer-term growth. This includes investment in close to 200 clean-technology manufacturing facilities announced throughout 2024. Deloitte estimates that these could bring close to 27,000 new jobs. Construction spending is also on the rise, which could bode well for the industry.

Key Trends for 2025

• Talent – Focus on a long-term talent strategy that includes addressing smart ways to meet the talent and skills gap. Not addressing talent challenges could result in 1.9 million manufacturing jobs going unfilled over the next decade, according to NAM.
• Artificial intelligence (AI) and generative AI – Using technology to improve operational efficiency and strengthen the use of artificial intelligence to help with use cases and day-to-day tasks.
• Supply chain – Leverage technology solutions and use supply chain planning tools to boost efficiency and increase resilience throughout the industry.
• Smart operations – Continued investment in digital technologies to address elevated costs, skills gaps and the need for whole-system efficiencies.
• Clean technology manufacturing – Using clean technology manufacturing to create targeted high-ROI products designed to help companies and their customers meet sustainability and emissions goals.

Deloitte

As we enter a new year, there’s no doubt the industry and its varied entities will continue to ebb and flow. If you’re looking to create a safe, flexible and efficient manufacturing ecosystem, contact CDMC. We’ll show you why having a deburring method in place can make your product and your system safer and your employees more efficient.