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Interested in the pain points of specific types of manufacturing executives? From IT to HR, purchasing, legal, health & safety & more, explore our Executive Perspectives series.
There’s no doubt about it. The U.S. manufacturing sector has faced and overcome huge challenges over the past few years and 2025 is holding true to the trend with its own set of headaches for your prospects in manufacturing. So what challenges and pain points are manufacturers facing right now and how might that impact your strategy?
Explore the these ten major manufacturing pain points for 2025 to help you cement your relationship with your current clients and find new clients most in need of your products and services.
On his first day in office, as anticipated, Trump signed the America First Trade Policy executive order. This directive outlines a comprehensive strategy to revamp U.S. trade policies, prioritizing the interests of American workers, manufacturers, and businesses. The policy seeks to rectify unfair and imbalanced trade practices, reduce trade deficits, and bolster national security through strong trade measures. Since then, the Trump Administration using tariffs as a sort of bargaining chip, leaving many manufacturers to wonder where exactly the dust will settle in terms of trade policy and how their businesses might be affected.
The Trump administration recently announced new tariffs targeting major trading partners, including China, Canada, and Mexico. In a recent development, President Trump has paused the tariffs on Canada and Mexico for 30 days to allow for further negotiations. This pause is contingent on these countries increasing their efforts to stop the flow of illegal drugs and undocumented workers into the United States. However, the 10% tariffs on China have already been implemented, prompting retaliatory measures from Beijing.
The tariffs are expected to increase costs for manufacturers and consumers alike. Goods such as oil, lumber, plastics, textiles, and computer chips will be affected, potentially leading to higher prices and supply chain disruptions. This could exacerbate inflationary pressures and create additional challenges for businesses already dealing with high interest rates.
On the other hand, tariffs can offer several potential benefits, such as protecting domestic industries from foreign competition, which can lead to job creation and lower unemployment rates. Tariffs can serve as a powerful bargaining tool in trade negotiations, pressuring trading partners to agree to more favorable terms. In some cases, tariffs can enhance national security by reducing dependence on foreign suppliers for critical goods.
The economic environment remains uncertain as the administration's tariff policies continue to evolve. Manufacturers and businesses will need to stay agile and prepared for potential changes in trade dynamics. Engaging in strategic planning and exploring alternative supply chains may help mitigate some of the risks associated with these tariffs.
Additionally, you can assist your clients by referring them to an industrial marketplace like IndustryNet, where they can find domestic suppliers of more than 11,000 types of products, parts and services.
On the subject of increased inflationary pressure, high interest rates have been a thorn in many manufacturers’ sides for the past few years. While the Federal Reserve's recent decision to pause interest rate hikes in January 2025 provides some temporary relief for manufacturers, industrial businesses are still staring down a challenging environment, as elevated rates continue to impact several critical areas of their operations and strategic planning. Let’s take a look:
Manufacturers are grappling with high loan payments that strain cash flow and limit investments in modernization, expansion, or weathering revenue dips, compounded by inflationary pressures and potential demand fluctuations. Tightened budgets due to sustained high interest rates often lead to delayed or canceled investments in new equipment, technology, or infrastructure, hindering long-term competitiveness and agility. The combination of inflation and high interest rates creates a cautious outlook, prompting manufacturers to hold off on hiring or expansion plans, impacting job creation and slowing sector growth. The Federal Reserve has indicated that while interest rates will remain high in the short term, there may be gradual reductions later in the year if inflation decreases, with a median year-end 2025 federal funds rate expectation of around 3.9%, suggesting potential rate cuts in the latter half of the year.
Related: Key Pain Points of Finance Executives in Manufacturing
While the Fed's decision maintains a challenging environment, manufacturers can adapt by engaging in careful financial planning, exploring alternative financing options, and prioritizing investments that deliver immediate operational efficiency gains. By proactively navigating these headwinds, manufacturers can emerge stronger and more resilient in the long run.
If you provide financial services, you may find heightened demand in the U.S. manufacturing sector. Now's the time to reach out to CFOs and business owners in industries most affected by high prices. IndustrySelect can help you do just that by providing key contact data for finance executives in U.S. manufacturing. Learn more about the Finance Executives in U.S. Manufacturing Database, containing 50,000+ finance executives across 47,000 U.S. manufacturing companies.
Industries have been experiencing more attacks through operational technology (OT) and the Internet of Things (IoT). While manufacturing relies on these networks to automate production, businesses often have few safeguards in place to protect them from sabotage.
In 2024, U.S. manufacturers are facing a continued surge in cybersecurity threats. As the industry increasingly adopts digital technologies and automation, it has become a prime target for cybercriminals. The threats range from data breaches and intellectual property theft to ransomware attacks that can halt production lines, causing significant financial and reputational damage. The interconnected nature of modern manufacturing processes also means that a single breach can have far-reaching impacts, affecting suppliers, customers, and even entire supply chains.
The FBI's Internet Crime Complaint Center (IC3) latest report provides a stunning overview of general cybercrime growth.
• Total Complaints: The IC3 received 800,944 880,418 complaints in 2023, a 10% increase from 2022 and a whopping 88% increase over 2018. Over the past five years there have been 3.79 million total complaints and $37.4 billion in total losses.
• Total Losses: Total losses increased dramatically from $10.3 billion in 2022 to over $12.5 billion in 2023, highlighting the severity of attacks.
Related: Core Challenges Faced by IT Executives in U.S. Manufacturing
Cybercrime trends your prospects in manufacturing are facing:
• Increased Sophistication: The report highlights attackers employing more sophisticated techniques, making detection and prevention more challenging.
• Supply Chain Risks: The interconnectedness of supply chains presents vulnerabilities that attackers exploit, creating ripple effects across businesses.
• Cryptocurrency Usage: Cybercriminals increasingly rely on cryptocurrency for ransom payments and transactions, making tracing and recovery difficult.
If your company provides IT services, consider an email outreach campaign educating manufacturers on this growing threat and on the services you have to offer. Or, get in direct touch with IT decision-makers with the Information Technology Executives in U.S. Manufacturing Database, only from MNI.
The manufacturing sector's resurgence faces a crucial hurdle – a tight labor market and widening skills gap. Attracting and retaining skilled workers remains a top challenge, impacting production, growth, and competitiveness.
While the number of unfilled positions continues to shrink from the historic post-pandemic highs, finding qualified candidates continues to be a challenge for manufacturers. Baby boomer retirements and a shift in younger generations' career preferences have shrunk the available workforce. This, coupled with the specific technical skills required in modern manufacturing, creates a perfect storm for talent acquisition.
Further reading: Key Challenges Faced by Human Resources Executives in U.S. Manufacturing
The skills gap further complicates the picture. Automation and digitalization demand workers with expertise in areas like robotics, data analytics, and advanced manufacturing processes. However, many manufacturers struggle to find individuals with the right qualifications, leaving them with unfilled positions and hindered innovation potential.
If your company provides staffing, training or workforce development services, now is the time to take a proactive approach and reach out to manufacturing companies in need of labor solutions. Learn more about the Human Resources Executives in U.S. Manufacturing Database, featuring 51,000 HR executives across 49,000+ manufacturing companies.
While supply chain disruptions were more of a major issue in post-COVID times, lingering issues remain. Key factors contributing to continued disruptions include ongoing geopolitical conflicts, such as the Russia-Ukraine war, which affects the availability of materials and resources. But it doesn't stop there. Climate-related events, cyberattacks, and regulatory changes are further complicating supply chain stability. The automotive, medical, and food sectors are particularly vulnerable to these disruptions.
With the Trump administration's return, manufacturers are wary of potential changes in trade policies and tariffs. The administration's focus on "America First" trade policies could lead to increased tariffs and stricter regulations, impacting global supply chains. Manufacturers are also concerned about the administration's stance on international trade agreements and potential renegotiations of existing deals, which could create uncertainty and disrupt established supply chains.
To stay on top of these challenges, manufacturers will need to focus on diversifying their supply networks, investing in technology to enhance supply chain visibility, and developing robust contingency plans to mitigate risks. By staying agile and proactive, they can better manage the uncertainties and maintain operational resilience.
You can assist your manufacturing clients by referring them to an industrial marketplace like IndustryNet, where they can source and quote multiple companies for the best price. Or, get in direct touch with your products and solutions.
As has been the trend over the past several years, uncertainty in the manufacturing sector reigns supreme. The International Monetary Fund's January 2025 World Economic Outlook predicts global growth to slow down to 2.9% in 2025, raising concerns about a potential recession. Consumer spending is expected to remain sensitive to prices despite income growth, which may impact demand for manufactured goods. Supply chain disruptions, driven by geopolitical instability and climate-related events, continue to pose significant challenges. Rising input costs further squeeze profit margins, leading to cautious investment and hiring decisions.
The key for manufacturers in this uncertain climate lies in agility and strategic foresight. Carefully monitoring economic indicators, diversifying markets, and exploring cost-saving measures can help weather the storm. Additionally, embracing digitalization and advanced technologies can improve efficiency and resilience in the face of potential disruptions.
If you’re selling to manufacturers, adaptability and fortitude are key. Offer flexible solutions with variable pricing or subscription models. Emphasize the long-term value your products deliver, even in an economic downturn. Be prepared to tailor your sales approach as economic conditions evolve. If you’ve got an airtight solution for manufacturers dealing with uncertainty, now’s the time to reach out directly to industrial decision-makers with IndustrySelect.
Industry 4.0 promised to ease some manufacturing pain points. Unfortunately, the research and investments required have turned into issues in and of themselves. Manufacturers still don't have a full picture of what smart automation actually does, with the industry adopting solutions without a unified vision, while implementing advanced tech and automation is easily said than done.
One of the primary hurdles is the high initial cost of implementing automation and advanced technologies such as AI, IoT, and robotics. These investments can be substantial, especially for small and medium-sized manufacturers. Convincing stakeholders to allocate budget for these technologies can be challenging, given the long payback periods and uncertain ROI.
Integrating new automation systems with existing legacy infrastructure presents another significant challenge. Many manufacturers operate with a mix of old and new technologies and ensuring compatibility can be complex and costly.
Automation necessitates a shift in workforce skills, requiring employees to be trained to operate and maintain new technologies, which can be time-consuming and costly. Resistance to change or fear of job displacement can further hinder adoption. Additionally, as manufacturers become more reliant on connected systems, cybersecurity risks grow, necessitating robust and resource-intensive measures to protect sensitive data and maintain operational integrity. Regular maintenance is essential to ensure optimal functioning of advanced technologies, but unplanned downtime due to technical issues can disrupt production and lead to significant financial losses. Investing in predictive maintenance solutions can help minimize these risks, though it adds another layer of complexity and cost.
Manufacturers also may struggle with data management, as automation generates vast amounts of data that need to be collected, analyzed, and managed effectively. Integrating, storing, and analyzing this data is crucial for informed decision-making and optimizing operations, but it can be daunting. Additionally, regulatory compliance adds complexity to adopting new technologies, requiring manufacturers to ensure their automated systems meet all relevant safety and quality standards.
The U.S. manufacturing sector, intricately woven into the global tapestry, feels the tremors from recent world events. The ongoing war in Ukraine continues to disrupt energy markets and key material supplies, while geopolitical tensions in other regions add further uncertainty.
These global events translate into real challenges for U.S. manufacturers: rising input costs, potential shortages of critical materials, and volatile shipping routes. Proactive strategies are crucial to navigate these disruptions. Diversifying sourcing options, exploring alternative suppliers, and building stronger relationships with existing partners can mitigate risks. Additionally, investing in digital tools for supply chain visibility and risk management can provide valuable insights and enhance resilience.
While the global landscape remains unpredictable, proactive planning and resourcefulness can help U.S. manufacturers weather the storm and emerge stronger. By navigating the current challenges and building adaptable supply chains, they can ensure continued growth and success in an interconnected world.
This is the time to concentrate your pitch on your company’s ability to monitor and guarantee the quality of its goods. While anything can happen in an overseas factory, your inspectors will be on top of the fabrication at every production stage. Many U.S. companies still want to buy American-made goods if they can afford them. Do your best to come up with a way that they can.
A once-heated U.S. manufacturing sector decidedly cooled in the post COVID era, with low demand plaguing the sector for a few years now, with the ISM reporting activity in the sector in contraction for 26 straight months. While the most recent data from the ISM finds an improving sector with demand on the upswing, manufacturers are still keeping a wary eye on demand.
Several factors contribute to this trend: rising inflation putting pressure on consumer spending, global economic uncertainty impacting business confidence, and potential inventory adjustments after previous backlogs.
One of the most exhausting manufacturing pain points is regulations. Manufacturers face strict regulations about plant operations, and most of them (a shocking 297,696 restrictions) come from the federal government.
Some of the regulations protect the safety of our nation’s food and drug supply. Others, such as the Buy American Act, boost America’s economy by relying on U.S. manufacturers as much as possible.
However, many regulations simply make it more difficult for manufacturers to operate efficiently. The National Association of Manufacturers estimates that federal regulations alone cost manufacturers $19,564 per employee every year.
Related: Key Pain Points Faced by Legal Executives in U.S. Manufacturing
The Environmental Protection Agency's (EPA) recent tightening of regulations on fine particulate matter (PM2.5), commonly known as soot, has sent ripples through the manufacturing sector. While the aim is to improve air quality and public health, the new standards present both challenges and potential opportunities for manufacturers.
Might this all change with the Trump presidency? Trump has consistently advocated for reducing regulatory burdens to boost domestic industries. This approach could lead to the rollback of several federal regulations that manufacturers currently find cumbersome, evidenced by the recent executive order that calls for the elimination of ten regulations for each new regulation issued.
The Trump administration has hinted it will ease some of the Environmental Protection Agency's (EPA) stringent regulations, including those on fine particulate matter (PM2.5). While this could reduce compliance costs and administrative burdens, it may also lead to increased scrutiny from environmental groups and potential legal challenges.
Trump’s "America First" policies could also result in stricter enforcement of the Buy American Act, further emphasizing the reliance on U.S. manufacturers. This could create both opportunities and challenges, as manufacturers may benefit from increased demand but also face higher costs for domestic materials.
As consumers grow more aware of their own carbon footprints, they expect a small carbon footprint from the products they buy. Manufacturing is one of the largest causes of environmental pollution. From toxic emissions to dangerous chemicals, manufacturing can be a hazard to the community, yet the complexity of achieving sustainability goals is compounded by several key factors.
As noted above, regulatory pressures are a significant concern, as manufacturers must comply with a growing array of environmental regulations aimed at reducing carbon emissions, improving energy efficiency, and minimizing waste. While the Trump administration may roll back some federal regulations, state-level and international requirements continue to demand substantial investments in new technologies and processes.
Achieving sustainability often involves overhauling supply chains to ensure they are environmentally friendly and socially responsible. This can be particularly challenging in a globalized economy where supply chains are intricate and interdependent. Manufacturers must work closely with suppliers to ensure compliance with sustainability standards, which can be a daunting task.
Explore our executive perspective series, laser focused on manufacturing execs and their unique challenges.
Keep IndustrySelect on hand as your partner as well. With detailed profiles of nearly 360,000 U.S. manufacturers and one million executive contacts, IndustrySelect can help you connect with the manufacturing companies in need of your products and services. Set up your free demo account today, loaded with 500 real company profiles so that you can test all the features of this powerful software! Or browse our executive-specific databases so you can get in touch with the decision-makers who are in most need your solutions.
Editor's Note: This post was originally published in September 2021. It has been updated to reflect new manufacturing pain points and approaches to take in 2025.
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