SURVEY: U.S. manufacturers are betting on growth despite economic pressures

New data reveals where manufacturers are investing and where they're vulnerable

COLUMBUS, Ohio, June 18, 2025 /PRNewswire/ -- U.S. manufacturers are operating in an environment of elevated risks as they navigate trade policy uncertainty, shifting regulations, potential supply chain volatility and labor market challenges. Despite these pressures – and recent softening in manufacturing sector sentiment – new research from Nationwide shows that industry confidence remains high as 8 in 10 manufacturing leaders expect positive business performance over the next 12 months. This optimism is largely driven by strategic investments in technology, supplier agility and operational resilience.

Nationwide's survey, fielded in April 2025 with 400 U.S. decision makers for mid-sized manufacturers, found that 65% rated business conditions in the U.S. as good or excellent, while an even greater share (79%) expressed confidence about conditions for their business specifically. Though tariff questions remain, 64% believe the levies will lead to positive impacts for their business one year from now.

"While pressures are building, many manufacturers remain optimistic as they take proactive steps to position for future growth," said Erika Melander, head of Nationwide's national manufacturing practice. "As trade tensions weigh on manufacturers, operators aren't standing still – they're strategically looking at reducing global exposures, investing in technology and strengthening operations to better manage risk and stay competitive."

Investing for the future

To position for long-term success, manufacturers are making calculated investments aimed at improving flexibility, resilience and speed. Many are taking steps to mitigate ongoing or future supply chain risks, such as:

• Expanding their supplier base (64%)
• Frontloading inventory (52%)
• Creating, reviewing or updating their business continuity plans (48%)

While global suppliers still play a key role for 75% of respondents, 1 in 3 (35%) report that they're shifting to more U.S.-based partners due to evolving trade policy and another 50% are considering it. 

Technology is also seen as a critical driver of growth in the year ahead. Digital tools are being adopted widely to streamline operations, with inventory management systems (91%) and Internet of Things (83%) solutions leading the way. Meanwhile, many manufacturers are leaning into AI technology to improve efficiency and stay competitive. Those already using AI report benefits, such as improved forecasting, cost savings, product quality, and supply chain agility. As reliance on digital tools grows, 31% of businesses say strengthening their cybersecurity is one of their largest business opportunities over the next year.

Caution beneath the confidence

Despite these upbeat survey results, other surveys point to downbeat views in the manufacturing sector. The May ISM Manufacturing Index declined for the third straight month, falling deeper into contraction territory activity in May as trade policy and economic uncertainty weighed on attitudes.

In Nationwide's survey, major concerns remain even among confident manufacturers. Top financial concerns include persistent inflation, changing tariffs, high interest rates, domestic market volatility and supply chain delays. For those worried about inflation, the most cited cost pressures include raw materials, energy, labor, maintenance and logistics. 

Despite efforts to source locally, nearly half of manufacturers (45%) still expect to rely on tariffed imports, fueling concern for 87% who worry that shifting trade policies could cause further supply chain delays and pricing disruptions. To manage these pressures:

• 32% plan to pass most rising costs on to customers
• 44% will absorb some costs and adjust pricing moderately
• 23% plan to absorb most costs without passing them on to customers

Labor shortages also remain a critical pain point. Nearly two-thirds (64%) say they struggle to attract and retain skilled workers, and about 3 in 10 cite difficulty finding employees with the right capabilities (28%) or offering compensation packages that meet expectations (27%). Additionally, two-thirds report that younger workers do not view manufacturing as a desirable career – posing long-term risks to talent pipelines.

Even technology adoption – seen by many as a competitive edge – comes with hurdles. While many are leaning into AI, 4 in 10 cite high costs as a barrier, followed closely by challenges integrating AI into existing systems (38%) and a lack of internal expertise (37%). Roughly 3 in 10 worry about product defects or underperformance, underscoring that even promising innovations require careful planning and execution.

Navigating uncertainty with strategy, partners and tools

As manufacturers prepare for what's next, a focused and flexible strategy is essential. Melander says leaders should prioritize three key areas to strengthen their position in a complex and evolving economy:

• Technology: Continue scaling technology, from inventory management systems and automation to AI, to drive efficiency and resilience.
• Talent: Redefine what a career in manufacturing looks like, emphasizing innovation, job security and purpose to appeal to the next generation.
• Risk Management: Partner with specialized insurance and risk advisors to reassess exposures, tailor coverage and develop mitigation strategies that support long-term needs. 

"Manufacturers who treat risk management as a strategic priority – not just a safety net – will be better equipped to weather volatility and sustain growth," said Melander. "By aligning their talent strategy, embracing technology and working with experienced insurance partners to anticipate and mitigate risk, they're building a more resilient and competitive future."

Learn more about manufacturing insurance and risk management resources, and view the full findings from Nationwide's survey here.

Methodology:
Nationwide commissioned Edelman Data and Intelligence to conduct a national online survey of 400 U.S. manufacturing business decision makers and 200 independent insurance agents who work with manufacturing clients from April 4 to April 21, 2025.

About Nationwide
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified financial services and insurance organizations in the United States. Nationwide is rated A+ by Standard & Poor's. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; and pet, motorcycle and boat insurance.

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SOURCE Nationwide